LNG

Expanding its presence in the liquefied natural gas (LNG) market is a promising activity area for Gazprom Group. Increasing LNG volumes in the Group’s supply portfolio makes it possible to achieve geographical diversification of supply, reduce transit risks, and increase export volumes by moving into new markets which are inaccessible for pipeline gas.

For more than a decade now, Gazprom Group has been actively ramping up volumes in its LNG trading portfolio — both through the implementation of its own projects, as well as through LNG purchases from third parties.

LNG trading within Gazprom Group is handled by Gazprom Marketing & Trading. The LNG portfolio managed by this company consists of LNG supplies from Russia’s only current project for liquefied natural gas — the Sakhalin-2 project. Additionally, LNG purchases are made from third parties within the scope of fixed-term agreements and spot transactions. In 2005–2016, Gazprom Marketing & Trading delivered over 300 LNG shipments to the markets of 14 countries, more than 120 of which originated from the Sakhalin-2 project. In 2016, Gazprom Group delivered 55 LNG shipments at a total volume of 3.7 mln t.

In future, the greater part of LNG volumes will come from various projects on Russian territory, including Vladivostok LNG, Baltic LNG, and the expanded capacity of the Sakhalin-2 liquefication plant. Completing these projects will enable a geographical expansion of supply, covering all the promising regional markets. Gazprom Group’s ability to compete in the LNG trade is based on the proximity of its liquefication projects to the major consumer markets, resource base for export, the Group’s own fleet of gas transport tankers, and a great deal of experience in LNG market trading.

Growing the LNG export portfolio — by developing Russian projects, by pursuing opportunities to participate in third-party projects, and by carrying out trading operations — facilitates positioning Gazprom as a global energy company.
 

Small-scale LNG (ssLNG) exports

In 2016, export sales of ssLNG amounted to roughly 22,000 t.

Work is continuing on expanding Gazprom Export’s presence in Europe’s ssLNG markets, as well as diversifying ssLNG deliveries by road and through the use of various logistics options, including on a remote basis.

The Company is actively working on bringing to market volumes originating from existing low-tonnage natural-gas liquification facilities and those currently under construction (facilities in Kaliningrad, Kingisepp, Pskov, Peterhof and Port Vysotsky, as well as under the Portovaya CS project).

Negotiations are underway with foreign companies on possible cooperation in the joint implementation of projects involving small-scale LNG infrastructure. These projects include the construction of LNG receiving terminals, LNG filling stations and other facilities, including a pilot project for the creation of a small-scale LNG receiving terminal in the Port City of Rostock (Germany).

Framework agreement on cooperation in the European ssLNG market was reached between Gazprom and Fluxys in March, 2016. Its implementation along with the pilot project for construction of ssLNG-receiving terminal in Rostock was discussed between Gazprom and Gasunie in June, 2016.

In September, 2016, a memorandum of understanding, which set the intentions for joint feasibility and marketing analysis of bunkering of liquefied natural gas-fueled marine vessels, was signed by the Chairman of Gazprom’s Management Committee Alexey Miller and the president and CEO of Japan-based «Mitsui & Co.» Joint works in the field of bunkering will allow developing cooperation in the segment of ssLNG.

Also in 2016, as a result of the work done to diversify the directions of ssLNG supplies, a commission contract was concluded with Gazprom Transgaz Yekaterinburg LLC, and another contract was signed for commodity supplies to the Republic of Kazakhstan. First regasification unit for LNG supplies under this contract was commissioned in Astana in February 2017, it is using Russian fuel produced by Gazprom Transgaz Yekaterinburg and supplied under the contract with Gazprom Export by road transport.
 

Related news:

Gazprom and Shell sign two agreements on Baltic LNG project — 03.06.2017

Gazprom and OMV signed a Framework Agreement to collaborate in the small-scale LNG sector — 02.06.2017

Gazprom and Fluxys discuss new European infrastructure for Russian gas supplies — 01.06.2017

Gazprom and Mitsui consider further steps under Agreement of Strategic Cooperation — 01.06.2017

First regasification unit for Russian LNG commissioned in Astana  – 13.02.2017

Gazprom and Mitsui discuss cooperation on small-scale LNG  – 02.11.2016

Gazprom and Mitsui sign Memorandum to cooperate in LNG bunkering studies  – 02.09.2016

Gazprom Export will start selling LNG to Europe from the small scale LNG plant commissioned in Pskov - 26.05.2016

Gazprom Germania Performed the First Ever Bunkering with LNG at the Port of Rostock - 02.03.2016

Gazprom Marketing & Trading sponsors the Main Engine Laboratory at the Admiral Makarov State University - 25.09.2015

Sakhalin Energy offloaded the 1000th LNG cargo - 26.08.2015