Novatek and its joint venture partner Gazprombank Cryogas-Vysotsk have started full-scale production of liquefied natural gas (LNG) from the Cryogas-Vysotsk LNG project in the Leningrad Region of Russia.
The Cryogas-Vysotsk LNG project, which is located along the Baltic Sea in the port of Vysotsk, has been built with an investment of around RUB54bn ($840m).
Cryogas-Vysotsk has an initial design capacity of 660 thousand tons of LNG per annum.
The medium-tonnage LNG project features a natural gas liquefaction complex – made up of two production lines, each having a capacity of 330 thousand tons of LNG per year. Also part of the Russian LNG project are a 42,000 m3 LNG storage tank and an offloading berth which can handle LNG carriers with a capacity of up to 30 thousand cubic meters.
A 43km long gas pipeline was built to connect the LNG project to the Leningrad-Vyborg-gosgranitsa gas pipeline.
The Cryogas-Vysotsk joint venture plans to deliver the LNG produced from the project to the domestic market as gas-engine fuel and to provide gas to consumers who have limited access to centralized gas supply systems.
The Cryogas-Vysotsk LNG project will also supply gas outside Russia to northern European countries, Scandinavia and the Baltic Region.
Cryogas-Vysotsk is the first medium-scale LNG project for Novatek, which acquired a stake of 51% in it for RUB1.583bn ($24.63m) in July 2017.
Novatek management board chairman Leonid Mikhelson said: “Our marketing strategy provides for loading of bunkering vessels, small wholesale LNG sales, and LNG sales as motor fuel to the Baltics, Scandinavia and North-Western Europe markets.
“Natural gas used as transport fuel reduces carbon emissions and complies with new environmental standards such as the sulfur emissions reductions mandated by IMO 2020. We see potential to expand our commercial presence in this developing LNG market segment”.
Russian President Vladimir Putin, who formally inaugurated the Cryogas-Vysotsk LNG project, said that plans are on to launch the second stage to enable a capacity of more than 1,100,000 ton of LNG per year. The phase 2 of the LNG plant is slated to be put into operations in late 2020.
Putin said: “There is no doubt that the plant will have a bright future. The global LNG market is making rapid headway: the demand for LNG is steadily growing both in this country and the rest of the world. I would like to emphasise that Russia will consistently build up its gas liquefying capacities so as to occupy a befitting niche in this market.”