The share of liquefied gas in cargo transportation along the Northern Sea Route will amount to 80%

27.01.2020

The share of liquefied gas in cargo transportation along the Northern Sea Route will amount to 80%

Liquefied natural gas (LNG) may become the main cargo transported along the Northern Sea Route (NSR) until 2035. According to the Arctic development strategy from the Ministry for Development of Russian Far East, by the end of the program, LNG will occupy 80% of Russian cargo in this direction.

"In 2018, LNG production in the Arctic amounted to 10.6 million tons; it is transported by sea. According to the strategy, its production will grow to 46.7 million tons in 2024, 73.5 million tons in 2030 and 120 million tons in 2035. As a result, by the end of the program, LNG will occupy 80% of Russian cargo transported along the Northern Sea Route», - the publication said.

Cargo transportation along the Northern Sea Route in 2018 amounted to 20.2 million tons, in 2024 they should grow to 80 million tons, in 2030 - to 120 million tons and by 2035 - to 160 million tons, and transit cargo will increase from 0,49 million to 10 million tons.

Thus, the development of the sea route will depend on the production and processing of gas and, to a lesser extent, oil. The authors of the strategy expect an increase in the share of Arctic oil and gas in total Russian production. The implementation of the strategy should also stimulate the development of new oil and gas provinces, deep oil refining and the production of liquefied natural gas. "It is proposed to expand production on existing and under construction LNG, develop gas and oil fields and develop gas and oil pipelines, as well as develop oil and gas services, creating industrial centers in settlements in the Arctic", - they said.

In 2018, 82.7% of the total Russian gas production was produced in the Arctic, by 2035 this figure should grow to 92%.

At present, only one LNG plant has been built in the Arctic – «Yamal LNG» by Novatek. In 2020, the company expects to launch its fourth production line; the actual LNG production capacity will be about 19 million tons per year. The current Novatek strategy implies an increase in the production of liquefied natural gas to 57 million tons per year by 2030, but Leonid Mikhelson, the company's chairman of the board, said earlier that it could be 65-75 million tons per year. Novatek has already begun to implement the Arctic LNG-2 project. It is planned to launch the plant with a capacity of 19.8 million tons in three phases from 2023-2025.

The representative of the Ministry of Energy of the Russian Federation said that "the resource base of Yamal allows achieving the indicators in the document." The Ministry of Economic Development and the Ministry for Development of Russian Far East declined to comment; Rosneft, Gazprom, Gazprom Neft and Novatek did not respond to requests.


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