The first plant was built in Russia in 2009. Prior to 2017 Gazprom was the sole producer of Liquefied Natural Gas (LNG) in Russia.
In 2013 private Russian companies were authorized to export LNG. An increase in production capacity from 2017 saw a threefold increase in exports from 11 to 33 million tons per annum (MTPA) by 2022.
Companies
The leading LNG company in Russia is Novatek who has plans to generate LNG capacity of 70 MTPA by 2030. In December 2022, French company TotalEnergies withdrew from the Novatek board and wrote off their $3.7 billion shareholding in Novatek as a result of sanctions following the 2022 Russian invasion of Ukraine.
Gazprom is undertaking very few developments, with Portovaya LNG being the only plant that has been built for them.
Rosneft is only in the design stage of LNG plants.
Exports
In 2022 Russia was the fourth largest LNG exporter with sales of around 33 million tons and expects to increase this as the production capacity rises to 15-20% of the world market by 2035.
The global demand for LNG is expected to rise around 85% from 2021 levels to 650-700 MTPA by 2040 with the USA and Qatar, which already export 70-80 MTPA each, expected to fill this new market.
Exports from the Arctic plants relies on ice breaking LNG carriers, only a few Arc7 tankers have been built of the 21 ordered. 15 are being built in Russia at a cost of $9.6 billion, however the hulls were to be built in South Korea and essential equipment on board the ships is sourced from South Korea and Japan which has sanctions implications, the remaining 6 are being constructed in South Korea. Three Korean construction orders were cancelled in May 2022 when payment deadlines were missed.
With the European Union committed to ending the purchase of fossil fuels from Russia by 2027, Russia must seek LNG markets elsewhere.
Plants
Liquefaction process
The most important infrastructure needed for LNG production and transportation is an LNG plant consisting of one or more LNG trains, each of which is an independent unit for gas liquefaction and purification. A typical train consists of a compression area, propane condenser area, and methane and ethane areas.
Storage
Floating storage units are needed at the arctic plants to hold the LNG before transfer to an Arc7 LNG gas tanker for onward shipment.
Transportation
Transhipment from the arctic plants need a specialist ship. Arc7 was designed as an ice breaking LNG gas tanker, capable of breaking through ice 1.5m think with its bow and 2.1m ice when travelling backwards. Each ship is 300m long and 50m wide with a capacity of 172,600 m3, powered by 6 diesel electric engines giving 45MW with the propulsion capable of rotating 360 degrees. 15 Arc7 ships serve the Yamal LNG plant.
Arc7 v2 ships were designed in December 2020 by Finnish icebreaker designer Aker Arctic, along with South Korea’s Daewoo Shipbuilding & Marine Engineering. The first are currently under construction, with 51MW power units making them capable of dealing with thicker ice. Novatek needs 42 of the new design to serve the new Arctic LNG 1,2 and 3 plants and deliver the LNG eastwards to Kamchatka for onward delivery to Asian customers.
Operational plants
Sakhalin-II was the first LNG plant in Russia, built for Shell plc and later acquired by Gazprom, located on Sakhalin island off the east coast of Russia in the Sea of Okhotsk. with a capacity of 9.6 MTPA.
The Yamal LNG plant, started in 2012 by Novatek and Gazprom is in Yamalo-Nenets Autonomous Okrug and has access to the arctic Kara Sea. The ownership changed in 2014 to Novatek 60% with 20% each held by China's CNPC and France's TotalEnergies. Novatec has since sold 9.9% to Chinas Silk Road Fund. Becoming operational in 2017 with China as the main export market, exports are being achieved using ice breaking gas tankers, the plant has a capacity of 16.5 MTPA.
Cryogas-Vysotsk plant is a small operation with access to the Baltic Sea, owned by Novatek and Gazprombank and started operation in 2019 the two trains have a capacity of just 0.67 MTPA. Plans are in place in 2023 to expand the operation to 0.9 MTPA.
Portovaya LNG is another small operation located close to the Russian Finnish border with access to the Baltic Sea that started in 2022, using the gas pipeline that used to supply the Nord Stream pipeline. The plant has a capacity of 1.5 MTPA. A third train is planned with a capacity of 2 MTPA.
Planned plants
Arctic LNG 1 is proposed with a 2027 construction start date and a capacity of 19.8 MTPA once completed. Owned by Novatek, the gas reserves were only confirmed in late 2022.