Russia’s Rosneft demands tax breaks to build pipeline to Arctic shipping lane: report

Chief Executive of Rosneft Igor Sechin attends a session of the St. Petersburg International Economic Forum (SPIEF), Russia June 6, 2019. Rosneft, along with Neftegazholding, are seeking tax breaks to build a 600-km-long pipeline from fields in Taymyr and Vankor areas to the Arctic coast according to Russian newspaper Vedomosti. (Maxim Shemetov/Reuters)
Rosneft makes clear that it can build a 600 km long pipeline to the Arctic Ocean and export millions of tons of oil through Arctic waters. But only if it gets major tax benefits from government.

The state company has addressed President Vladimir Putin with a request to slash taxes on its projected mega-project in Northern Russia.

Neftegazholding, the company owned by former Rosneft-leader Eduard Khudainatov, also stands behind the request to the Kremlin, newspaper Vedomosti reports.

The tax benefits are needed for the building of a 600 km long pipeline from fields in Taymyr and the Vankor area to the Russian Arctic coast, the two companies argue.

Rosneft has earlier made clear that it considers building a pipeline from the Vankor area in north Siberia to Dikson, the town located on the coast of the Taymyr Peninsula, in Russia’s central Arctic. The pipeline would be about 600 km long and have the capacity to carry at least 25 million tons of oil per year.

The project could include Neftegazholding’s Payakha in Taymyr, the fields that are believed to hold as much as 1.2 million tons of oil.

If built, the project would become a key part of Vladimir Putin’s grand plan to boost annual shipments on the Northern Sea Route to 80 million tons by 2024.

According to Vedomosti, President Putin has expressed support to the joint project of the two companies and requested the “development of a mechanism.”

It is believed that the requested tax cuts first of all concern the mineral extraction. It is not known how much it would cost the Russian state budget.

Related stories from around the North:

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

Norway: LNG-reloading operations end in Norway’s Arctic waters, The Independent Barents Observer

Russia: Russia aims to make Northern Sea Route world-class shipping lane, The Independent Barents Observer

United States: New U.S. icebreaker will focus on Antarctic, says Coast Guard boss, 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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