Ust Luga LNG Terminal

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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Ust Luga LNG Terminal (Russian: СПГ-терминал в Усть-Луге), formerly known as Baltic LNG Terminal, is a liquefied natural gas (LNG) export terminal under construction in Russia.

Location

The terminal is proposed to be located in Ust-Luga Port, Kingiseppsky District, Leningrad Oblast, Russia.

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Project details

Train 1

  • Operator: RusKhimAlyans[1]
  • Owner: RusKhimAlyans[2]
  • Parent company: Gazprom [50%], RusGazDobycha [50%][3][4]
  • Location: Ust-Luga Port, Kingiseppsky District, Leningrad, Russia
  • Coordinates: 59.76812511089331, 28.44062603769416 (approximate)[5]
  • Capacity: 6.5 mtpa[3][6][4]
  • Status: Construction[7][4]
  • Type: Export[3]
  • Start year: 2024[7][4]
  • Cost: RUB 3 trillion (the whole complex: LNG plant, gas-to-polymers processing facility, and the terminal)[8]
  • Financing: US$12.2 billion from Russian National Welfare Fund,[9] RUB 445 billion loan from VEB bank[10]

Train 2

  • Operator: RusKhimAlyans[1]
  • Owner: RusKhimAlyans[2]
  • Parent company: Gazprom [50%], RusGazDobycha [50%][3][4]
  • Location: Ust-Luga Port, Kingiseppsky District, Leningrad Oblast, Russia
  • Coordinates: 59.76812511089331, 28.44062603769416 (approximate)[5]
  • Capacity: 6.5 mtpa[3][6]
  • Status: Construction[7][4]
  • Type: Export[3]
  • Start year: 2025[4]
  • Cost: RUB 3 trillion (the whole complex: LNG plant, gas-to-polymers processing facility, and the terminal) [8]
  • Financing: US$12.2 billion from Russian National Welfare Fund,[9] RUB 445 billion loan from VEB bank[10]

Train 3

  • Operator: RusKhimAlyans[1]
  • Owner: RusKhimAlyans[2]
  • Parent company: Gazprom [50%], RusGazDobycha [50%][3][4]
  • Location: Ust-Luga Port, Kingiseppsky District, Leningrad Oblast, Russia
  • Coordinates: 59.76812511089331, 28.44062603769416 (approximate)[5]
  • Capacity: 6.5 mtpa[3][6]
  • Status: Construction[7][4]
  • Type: Export[3]
  • Start year: 2026[4]

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 Leningrad Oblast, Russia.[11][12] In June 2017, Gazprom and Shell set up a joint venture to pursue the project.[13] The project was set to go online in 2022-23.[14] The 2019 plan stated the supply would come from the Tambey fields on the Yamal Peninsula in West Siberia.[6]

In December 2018 Gazprom and Itochu signed a memorandum of understanding (MOU) to jointly pursue the project.[15] In April 2019 Shell announced that it was withdrawing from the project.[16] 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.[2]

In May 2021, Gazprom announced that it had commenced construction on the gas complex site at the port of Ust-Luga.[7] 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.[17][18] In November 2021, Mitsubishi Heavy Industries was contracted to supply the main refrigeration gas compression trains.[19]

As of late 2021, estimates of the terminal's start-up date ranged from 2024 to 2026.[18][19] 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.[20]

According to the IGU World LNG Report 2022, Baltic LNG Terminal was renamed to Ust Luga LNG Terminal.[21] According to IGU, as of 2022 the expected start year was 2025 for both terminals.[21]

Linde GmbH left the project following the invasion of Ukraine.[22] The project, including the two trains to produce 13 mtpa of LNG and a complex to process ethane is estimated at RUB 3 trillion.[8]

Following the Russian invasion of Ukraine, the sanctions and the withdrawal of partners, including Linde GmbH, may have delayed the project.[23] Russia is considering alternatives such as domestic turbines or partnering with China.[24][25] As of July 2023, the status of the project is uncertain, with the latest update in December 2022 claiming that the LNG plant was in construction.[24]

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.[2] The overall project costs are said to be at least US$12 billion.[26]

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.[27] 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.[6]

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."[9]

Articles and resources

References

  1. ↑ 1.0 1.1 1.2 "Подписан ЕРС-контракт по заводу сжижения природного газа в составе Газоперерабатывающего комплекса в районе Усть-Луги". baltlng.ru. 2021-09-09. Retrieved 2023-06-29.{{cite web}}: CS1 maint: url-status (link)
  2. ↑ 2.0 2.1 2.2 2.3 2.4 Russian bank VEB to provide $741 mln loan for Gazprom's new LNG project, Reuters, Aug. 24, 2020
  3. ↑ 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 Baltic LNG Project, NS Energy, accessed April 12, 2021
  4. ↑ 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 "Для СПГ-завода Русхимальянса в Усть-Луге могут закупить российские турбины ГТД-110М" (in русский). Retrieved 2023-06-29.
  5. ↑ 5.0 5.1 5.2 "59°46'12.5"N 28°26'27.3"E". 59°46'12.5"N 28°26'27.3"E. Retrieved 2023-06-30.
  6. ↑ 6.0 6.1 6.2 6.3 6.4 Afanasiev (58b00667a5209), Vladimir (2021-09-22). "State lifeline: Russia promises $12 billion to Baltic LNG project | Upstream Online". Upstream Online | Latest oil and gas news. Retrieved 2022-06-28.
  7. ↑ 7.0 7.1 7.2 7.3 7.4 Vladimir Soldatkin, Russia's Gazprom begins building Baltic Sea gas processing plant, Reuters, May 21, 2021
  8. ↑ 8.0 8.1 8.2 "Мегапроект в Усть-Луге может получить 0,9 трлн руб. из ФНБ вне общей квоты". Interfax.ru (in русский). 2021-09-21. Retrieved 2023-06-29.
  9. ↑ 9.0 9.1 9.2 Afanasiev (58b00667a5209), Vladimir (2021-09-22). "State lifeline: Russia promises $12 billion to Baltic LNG project | Upstream Online". Upstream Online | Latest oil and gas news. Retrieved 2022-06-28.
  10. ↑ 10.0 10.1 "ВЭБ.РФ увеличит финансирование проекта ГПЗ в Усть-Луге на 445 млрд руб". Interfax.ru (in русский). 2021-08-20. Retrieved 2023-06-29.
  11. ↑ Baltic LNG Terminal, Wikipedia, accessed April 2017.
  12. ↑ Baltic LNG, Gazprom website, accessed July 2017.
  13. ↑ Gazprom, Shell ink Baltic LNG deals, LNG World News, 5 June 2017.
  14. ↑ Report: Gazprom delays Baltic LNG start, LNG World News, 10 Mar. 2017.
  15. ↑ Gazprom and Itochu sign Memorandum of Understanding on Baltic LNG project, World Oil, Dec. 14, 2018
  16. ↑ Shell exits Gazprom-led LNG project in Russia, Reuters, Apr. 10, 2019
  17. ↑ Gazprom’s board approves deal with Linde on third Ust-Luga LNG train, LNGPrime, Dec. 24, 2021
  18. ↑ 18.0 18.1 "Gazprom to sign memo with Linde for third line of Ust-Luga LNG plant". Reuters. December 24, 2021. {{cite web}}: |first= has generic name (help); |first= missing |last= (help)CS1 maint: url-status (link)
  19. ↑ 19.0 19.1 "Mitsubishi Heavy wins order for Ust-Luga LNG". Offshore Energy. November 26, 2021.{{cite web}}: CS1 maint: url-status (link)
  20. ↑ "Can Russia Execute a Gas Pivot to Asia?". CSIS (Center for Strategic & International Studies). May 4, 2022.{{cite web}}: CS1 maint: url-status (link)
  21. ↑ 21.0 21.1 "IGU World LNG Report 2022". Retrieved 2022-07-26.{{cite web}}: CS1 maint: url-status (link)
  22. ↑ "Gazprom JV Sues Linde Over Stalled LNG Project". Energy Intelligence. 2023-01-04. Retrieved 2023-06-29.
  23. ↑ "Gazprom JV Sues Linde Over Stalled LNG Project". Energy Intelligence. 2023-01-04. Retrieved 2023-06-29.
  24. ↑ 24.0 24.1 "РусХимАльянс подал иски почти на 31 млрд руб. к немецким Deutsche Bank и Commerzbank" (in русский). Retrieved 2023-07-20.
  25. ↑ "К строительству завода СПГ в Усть-Луге хотят привлечь китайских партнёров". dp.ru (in русский). Retrieved 2023-07-20.
  26. ↑ Gazprom receives a US$739m loan from VEB for its Baltic LNG project (Russia), Enerdata, Aug. 25, 2020
  27. ↑ NIPIGAZ got bearish at Ust-Luga – A major Gazprom project in the Baltic is changing its contractor, Kommersant, Mar. 15, 2021
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