Ust Luga LNG Terminal

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Ust Luga LNG Terminal, formerly known as Baltic LNG Terminal, is an under construction LNG export terminal in St. Petersburg Oblast, Russia.

Location

The map below shows the location of the project, in Ust-Luga Port, Kingiseppsky District, St. Petersburg Oblast.

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Project Details

Train 1

• Owner: RusKhimAlyans
• Parent: Gazprom, RusGazDobycha (a subsidiary of the National Gas Group)
• Location: Ust-Luga Port, Kingiseppsky District, St. Petersburg Oblast, Russia
• Coordinates: 59.72087, 28.43132 (exact)
• Type: Export
• Capacity: 6.5 mtpa
• Status: Construction
• Start Year: 2024
• Financing: US$741 million loan from VEB

Train 2

• Owner: RusKhimAlyans
• Parent: Gazprom, RusGazDobycha (a subsidiary of the National Gas Group)
• Location: Ust-Luga Port, Kingiseppsky District, St. Petersburg Oblast, Russia
• Coordinates: 59.72087, 28.43132 (exact)
• Type: Export
• Capacity: 6.5 mtpa
• Status: Construction
• Start Year: 2024–2026

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Baltic LNG Terminal was a proposed liquefied natural gas (LNG) liquefaction terminal in St. Petersburg Oblast, Russia. In June 2017, Gazprom and Shell set up a joint venture to pursue the project. The project was set to go online in 2022-23. The 2019 plan stated the supply would come from the Tambey fields on the Yamal Peninsula in West Siberia.

In December 2018 Gazprom and Itochu signed a memorandum of understanding (MOU) to jointly pursue the project. In April 2019 Shell announced that it was withdrawing from the project. Shell's departure was due to Gazprom integrating the Baltic LNG project and gas processing plants and its setting up of the special purpose vehicle RusKhimAlyans, a 50-50 joint venture with its Russian partner RusGazDobycha, which is said to have links to an ally of Russian President Vladimir Putin.

In May 2021, Gazprom announced that it had commenced construction on the gas complex site at the port of Ust-Luga. Linde and Renaissance Heavy Industries have been contracted to build the two-train 13 mtpa LNG export terminal. In December 2021, Gazprom announced that its board had approved a memorandum with Linde regarding the construction of a third liquefaction train at the gas and LNG complex. No details about the planned Train 3 were provided. In November 2021, Mitsubishi Heavy Industries was contracted to supply the main refrigeration gas compression trains.

As of late 2021, estimates of the terminal's start-up date ranged from 2024 to 2026. However, Gazprom's relative lack of experience with LNG projects and its need to pivot from European to Asian markets in response to the Russia-Ukraine war have raised questions about the terminal's future.

According to the IGU World LNG Report 2022, Baltic LNG Terminal was renamed to Ust Luga LNG Terminal. According to IGU, as of 2022 the expected start year was 2025 for both terminals.

Financing

In August 2020, the Russian state-owned development bank VEB said it was providing Gazprom with a US$741 million loan for the project. The overall project costs are said to be at least US$12 billion.

In March 2021, Russian business daily Kommersant reported that the project's engineering, procurement and construction (EPC) contractor NIPIGAZ had either been dismissed or had resigned. Kommersant speculated that this may have been due to the general lack of funding in place for the project, with the Russian state potentially keen to employ China National Chemical Engineering Construction Company Limited (CC7) as the EPC contractor as part of a larger deal aimed at attracting necessary additional financing from Chinese banks. However, in the later part of 2021, reportedly Ruskhimalliance signed contracts for the projects EPC with a consortium of Germany’s Linde and Turkey’s Renaissance Heavy Industries.

In September 2021, Russian authorities disclosed plans to fully finance the LNG terminal. The 12.2 billion USD (900 billion rubles) line of credit is reportedly "unprecedented for a single lender."