Russia builds artificial islands to ship LNG
The Novatek project will facilitate Yamal new gas fields’ exploration
24 June, 2017
Russian Prime Minister Dmitry Medvedev signed last Saturday a decree for the creation in the Barents Sea of four artificial islands, the Cabinet of Ministers announced on its website. It is reported that artificial objects are created in the Kola Bay for the arrangement of offshore structures.
The initiative is part of a large-scale project to explore new gas fields in Yamal, run by energy company Novatek, Russian media said. The land strips in the Barents Sea will be used to manufacture large-capacity maritime equipment for the liquefied natural gas (LNG) producing industry, including storage, shipping and maintenance facilities. The project will be funded by Kola Shipyard, with total costs estimated to reach over 25bn rubles ($433m). The Kola Yard was established in early 2015 as a subsidiary fully owned by Novatek. “This will pave the way for the creation of about 10,000 new jobs, increase tax revenues to budgets on all levels, attract investments to the region and develop new high-tech production capacities,” a press release from the federal government reads.
The potential LNG production on the Yamal Peninsula is estimated at 70 million tonnes a year. The arrangements are needed in connection with the development of the Kola Yard, Novatek’s new plant for construction of LNG modules. The islands will be located close to Novatek’s projected plant area in Belokamenka, a site on the western side of the Kola Bay in Murmansk Region. The first dry dock is expected to be commissioned in the first half of 2019. The new plant in Belokamenka will constitute a key element in Novatek’s development of the Arctic LNG-2, the company’s second liquified gas plant in the Arctic. The first one is currently being constructed as part of the Yamal LNG project. It has an annual capacity of 16.5 million tonnes.
LNG will be shipped on ice-class LNG tankers at the port of Sabetta and then transported via the Northern Sea Route. A total of 15 LNG tankers are planned to be constructed. The first was recently named after Christophe de Margerie, the former head of Total, who died in a plane crash at the Vnukovo airport in Moscow in 2014, Sputnik agency said.
The tankers can withstand temperatures of up to 61 degrees Fahrenheit below zero and navigate ice layers of up to two metres thick. They are capable of carrying over 172,000 cubic metres of LNG.
During the 2017 St. Petersburg International Economic Forum (SPIEF), held in June, Novatek signed a memorandum of understanding on an investing agreement with the Russian Commerce Ministry and the government of the Murmansk Region. "A centre to manufacture large-capacity maritime facilities would be very important to further explore the enormous resource potential of Russia’s Far North. Such a facility will increase the competitive ability of future LNG projects," Novatek CEO Leonid Mikhelson said. In turn, the Murmansk government said that investments in the region would reach over 50bn rubles ($866m). The initiative has a strategic investment project status, observers noted.
According to Russian Energy Minister Alexander Novak, after Yamal LNG starts operating at full capacity, gas exports from Russia will increase by 10% and Russia’s share in the global LNG market will expand to eight-nine percent.