Chinese investors could finance Murmansk LNG

Reportedly, the Chinese companies have long called for a reduction of the tax, and Mikhelson now calls on government to follow up. (Atle Staalesen/The Independent Barents Observer)

Leader of natural gas company Novatek pushes for tax benefits for Chinese companies investing in the Russian Arctic.

According to Leonid Mikhelson, the companies CNPC and Silk Road Fund should be exempted dividend tax in project Yamal LNG. In return, the Chinese will re-invest the money in new LNG projects in the Arctic.

According to newspaper Kommersant, Leonid Mikhelson has already sent a request to the federal government about the issue.

The Chinese companies CNPC and Silk Road Fund own 20 percent and 9,9 percent respectively of the Yamal LNG. In the Arctic LNG 2 project, the CNPC and CNOOC both own 10 percent stakes.

The Yamal LNG project. (Atle Staalesen/The Independent Barents Observer)

They all pay a 10 percent tax on dividends.

Reportedly, the Chinese companies have long called for a reduction of the tax, and Mikhelson now calls on government to follow up.

The Novatek leader argues that the tax be fully exempted, alternatively reduced to five percent. French partner Total, which own 20 percent of the Yamal project, only pay 5 percent dividend tax.

In return, the Chinese companies will re-invest the money in new LNG projects, Mikhelson explains.

The request comes at the same time as Novatek announces plans for a new LNG project in the Kola Peninsula. The Murmansk LNG is to have a capacity of 20,4 million tons per year, and launch the first of three projected development trains already in 2027. The project will apply floating gravity-based structures built at Novatek’s Kola Yard in Belokamenka.

The Murmansk seaport. (Thomas Nilsen/The Independent Barents Observer)

The project also includes a pipeline connection from Murmansk to Volkhov, the gas distribution hub located near St.Petersburg, and it will take advantage of cheap electric power from the Kola Nuclear Power Station, Kommersant reported.

Related stories from around the North: 

Canada: Nuclear power no solution for the N.W.T., some experts suggest, CBC News

Finland: Lapland among regions not in favour of wind power compensation for eastern Finland, Yle News

Norway: Will the green transition be the new economic motor in the Arctic?, Eye on the Arctic

Sweden: Wind farm delays in northern Sweden could hinder green revolution, Radio Sweden

Russia: Novatek mulls 1,300 km pipeline to LNG plant in Murmansk, The Independent Barents Observer

United States: Alaska can boost fuels, renewables; clean energy advocates disagree, Dunleavy says, 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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