Yamal megaproject

From Global Energy Monitor

Description of Project

The Yamal Peninsula is located on the northern coast of Russia, and is actively evolving as a gas production center. It includes the Bovanenkovo production zone, the Tambey production zone, and the Southern production zone. A gas transmission corridor is in place linking the Bovanenkovo zone to Russia's Unified Gas Supply System, and year-round oil shipments can be made from the Arctic Gate oil loading terminal.[1]

In March 2019 Gazprom held an inaugural ceremony in the Yamal-Nenets Autonomous Area to mark the launch of full-scale development of the Kharasaveyskoye field.[2]

Reserves and CO2 Emissions

The Yamal peninsula contains the biggest gas reserves on the planet.[3] In all, the 32 fields located on the Yamal Peninsula contain 26.5 trillion cubic meters of gas (1,330 trillion cubic feet), 1.6 billion tons (11 billion barrels) of gas condensate, and 300 million tons of oil. Production in 2017 was 82.8 billion cubic meters of gas, and prospects are for production to rise to 360 billion cubic meters of gas per year.[1] This amounts to approximately 70 billion tonnes of CO2, based on .43 metric tonnes of CO2 per barrel of oil or natural gas liquids, and 0.0550 metric tonnes of CO2 per thousand cubic feet of natural gas.[4]

Strategic Significance

Yamal has been described as a "gateway" for Russia's development of Arctic hydrocarbon resources.[5]

Companies Involved

The Yamal gas project is owned by Novatek (50.1%), Total (20%), China National Petroleum Corporation (20%), and the China Silk Road Fund (9.9%).[6]

Novatek is also developing the project with technical support from various foreign companies, including Technip (France), Linde (Germany), and Saipem (Italy).[7]

Potential ESG Risks


According to Greenpeace, Gazprom reports approximately 870 gas spills per year. Spills and climate change pose a heightened threat to the Yamal's indigenous Nentsy population and the environment "due to the presence of permafrost on the Yamal Peninsula, disruptions to soil quality gives way to changes in drainage pattern and pooling, leading to erosion problems, flooding, and subsequently, disturbed reindeer migration routes. The local hydrology also changes, as ground and surface water are contaminated. In low temperature areas such as the Yamal region, the self-cleaning capacity of many water sources is relatively low. Thus, contamination has the potential to directly threaten both the Nentsy relying on groundwater for drinking, as well as the health and breeding of local fish, such as the white salmon and muksun.[8]

Massive sinkholes have been opening in the Yamal region since 2014 and are gaining worldwide attention. The sinkholes are likely caused by a combination of warming temperatures in Siberia, releases of methane, and shifts in underground hydrocarbon deposits.[9]

Indigenous Rights

With 275,000 reindeer on the Yamal Peninsula, herders would be particularly impacted by the project, which will interfere with migration routes. 70 percent of the population of the Yamalsky District, where Yamal LNG is located, is indigenous. 6,000 of these are nomadic reindeer herders, mostly from the Nenets community. "If we cannot migrate anymore, our people may just disappear altogether," said one herder to Survival International.[10]

NGO's Involved

  • Center for Support of Indigenous Peoples of the North (CSIPN)[11]

Status of Project

Yamal LNG is being developed by a Russian company Novatek and consists of three liquefaction trains, each with a capacity of 0.7 billion cubic feet per day (Bcf/d). The first train began producing LNG in December 2017, while the second and the third trains are scheduled to come online in October 2018 and July 2019.[12]

Project Economics

Russia is keen to present its oil and gas industry as conducting business as usual despite tensions with the US.[13]

Yamal LNG has some of the lowest natural gas feedstock costs in the world (at $0.38 per million British thermal units (MMBtu), according to project developer Novatek. The project also benefits from the Russian government’s support, including a 12-year exemption from the mineral extraction tax, no export taxes on LNG, and government-subsidized construction of the port of Sabetta.[12]

Tax Revenues

Oil and gas revenues comprise roughly 40% of the Russian government's budget.

International Dynamics

In August 2017 the U.S. expanded sanctions against Russia to cover oil and gas export pipelines.[14]

In February 2018 a bipartisan group of U.S. Senators introduced the DETER Act, which would impose further sanctions on Russia's oil and gas industry if U.S. intelligence agencies found evidence of further Russian meddling in U.S. elections. The bill gained eight additional senate sponsors after President Trump's denial of Russian meddling at his July 2018 summit with Russian President Vladimir Putin.[15] U.S. oil companies including ExxonMobil oppose the bill and argue that foreign energy rivals such as Royal Dutch Shell and BP are gaining an unfair advantage to operate in an area that is the world’s biggest oil producer.[16]


In April 2016 Novatek obtained a US $12 billion loan from the Export-Import Bank of China and the China Development Bank. The loan enabled Novatek to continue developing the project in the face of U.S. sanctions.[6]

Articles and resources


  1. 1.0 1.1 "http://www.gazprom.com/about/production/projects/mega-yamal/," Gazprom, accessed 8/18
  2. Megaproject starts full-scale field development, Pipelines International, Mar. 22, 2019
  3. Luke Harding, "Yamal peninsula: The World's biggest gas reserves," Guardian, 20 October 2009
  4. Based on “US EPA Greenhouse gas equivalencies at http://bit.ly/2Odz3df.
  5. "Yamal as a gateway to the future sustainability Arctic energy prosperity," accessed 8/18
  6. 6.0 6.1 China lenders provide $12 bln loan for Russia's Yamal LNG project-sources, Reuters, Apr. 28, 2016
  7. Foreigners take lead in planning of Russia’s second Arctic LNG project, The Barents Observer, Jan. 10, 2018
  8. The Nentsy in Russia’s Energy-Heavy Yamal Peninsula, geohistory, Nov. 26, 2017
  9. Mysterious craters blowing out of Russia could mean trouble for the whole planet, CNBC, Jul. 30, 2017
  10. Mélodie Viallon, "New Gas Plant Threatens Indigenous Livelihoods in Russia's Far North," Institue for Security & Development Policy, 1 March 2018
  11. "Oil and Gas Threaten a Millennium of Traditions," Global Greengrants Fund, 28 October 2009
  12. 12.0 12.1 Natural Gas Weekly Update, EIA, Dec. 20, 2017
  13. Russia’s Yamal gas project navigates ice and sanctions, Financial Times, Oct. 20, 2017
  14. As Trump Signs New Russian Sanctions; Old Ones Don’t Stop Oil Exploration, Oil Change International, Aug. 3, 2017
  15. Russia sanctions bill gains bipartisan traction in Senate, Politico, Jul. 20, 2018
  16. U.S. oil industry lobbies against tighter sanctions on Russia, Reuters, Jul. 20, 2018

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