Olga Mordyushenko: the sale of both Gazprom’s LNG plants in Ust-Luga for 13 million tons and NOVATEK’s Arctic LNG-2 for 20 million tons, which have already entered the active stage of construction, has come into question

24.05.2022       

The European Union in April introduced the fifth package of sanctions, which included a wide list of bans on the supply of oil refining equipment to Russia, including such basic technological processes as alkylation and isomerization, catalytic reforming and cracking, hydrocracking and delayed coking, as well as the production hydrogen. The EU also limited access to technology for the oil and gas industry and for gas liquefaction projects. All equipment included in the list has been purchased in recent years mainly in Europe and the USA. Because of this, the implementation of Gazprom LNG plants, which have already entered the active stage of construction, has come into question. in Ust-Luga for 13 million tons and Arctic LNG-2 NOVATEK for 20 million tons, and those planned for the future. Such restrictions put Russia on a par with Iran, which has been under sanctions for four decades and, having the second largest gas reserves in the world, cannot realize its raw material potential.
The West introduced measures against the Russian economy after the annexation of Crimea in 2014 year, but then they were more of a financial nature, limiting the fuel and energy complex's access to long-term lending, and also concerned exploration and production on the deep sea shelf. In response, the government launched an import substitution program. As stated in the Ministry of Industry and Trade, since then Russian enterprises have serially mastered the main range of capacitive, reactor and heat exchange equipment, pumps, compressors, separators for oil and gas cleaning, as well as catalysts for oil refining processes. At the same time, the ministry admits that a significant part of the unique, unparalleled products that have yet to be re-developed in Russia has remained.
The attempt to replace foreign technologies in the field of gas liquefaction after 2014 was not crowned with significant success. The only LNG line assembled entirely on Russian equipment operates at the NOVATEK Yamal LNG plant. In addition to the fact that it is several times lower in capacity than the others (0.9 million tons per year), the company has repeatedly complained about interruptions in its work and filed numerous claims against contractors.
New anti-Russian measures were taken back in February 2022 , and even then it became obvious that the fuel and energy complex will face serious difficulties due to bans from the West, which are aimed at stopping the modernization of Russian oil refineries (refineries). On additional deepening of processes at 14 plants worth about 1 trillion rubles. the largest oil companies agreed with the Ministry of Energy in 2021. In exchange for 50 billion rubles. investments in each project, the state provided companies with subsidies through the reverse excise tax on oil. It was planned to complete the modernization before 2026, but now these dates will be at least shifted, and at the maximum — projects will remain frozen indefinitely.
Kommersant