Russia to spend €1 billion on Arctic gas terminal

Liquified natural gas (LNG) installations in Sabetta, on Russia’s Yamal Peninsula. (Atle Staalesen/The Independent Barents Observer)
The Russian federal government intends to spend 70 billion rubles (€965 million) on the construction of a new major Arctic terminal for storage and reloading of LNG. The project investment plan was this week approved by Prime Minister Dmitry Medvedev. It is to stand ready for operations in year 2023.

According to the government instruction, the investment plan includes the building of two floating storage facilities, a support landing pier and necessary coastal infrastructure.

The announcement comes only few weeks after the government approved a similar terminal project on the country’s Pacific coast, in Bechevinka on peninsula Kamchatka.

The two terminal facilities are both to serve natural gas company Novatek and its major development of new LNG projects in the Arctic. The Yamal LNG is already producing up to 16.5 million tons of LNG. A second project, the Arctic LNG 2, is under development and will ultimately deliver 19.8 million tons per year.

The government document does not specifically say where in the Kola Peninsula the new terminal is to be built. However, Novatek has earlier made clear that it wants it to be located in Ura Guba, the fjord that houses one of the Northern Fleet’s most important naval bases.

Ura Guba is located about 50 km to the northwest of Murmansk. It has a deep and year-round ice-free fjord, and is considered among the most favourable spots for shipping and logistics on the Kola Peninsula. The local Navy base today houses several nuclear-powered submarines, including Sierra-II and Victor-III vessels.

The new terminals will enable Novatek to cut costs for the transportation of the liquified natural gas. The top class ice-protected Arc7 tankers that today shuttle to and from the seaport of Sabetta in Yamal are far more expensive to operate than conventional tankers. The ice-class tankers will shuttle to the new terminals and conventional tankers will pick up the natural gas and deliver it to customers in Europe and elsewhere.

Since late 2018, Novatek has engaged in ship-to-ship reloading of LNG in the Norwegian Sarnes Fjord. These operations will later this year be moved to Russian waters, Novatek leader Leonid Mikhelson has confirmed. Ship-to-ship reloading are due to continue until the permanent terminals are ready.

Related stories from around the North:

Canada: Report critical of federal infrastructure spending in Northern Canada, CBC News

China: Russia, China step up talks over Arctic shipping, The Independent Barents Observer

Finland: Authorities in Arctic Finland plan zones for controversial rail line, Yle News

Norway: Norway expands Arctic drilling while promising emissions cuts, The Independent Barents Observer

Russia: The Arctic shipping route no one is talking about, Cryopolitics Blog

United States: U.S. Interior Dept. delays offshore drilling plan: report, Alaska Public Media

Atle Staalesen, The Independent Barents Observer

For more news from the Barents region visit The Independent Barents Observer.

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