Russia's Yamal LNG train 4 to produce first LNG in Q1 2021

04/12/2020 08:33 LNG


Russian LNG exporter Novatek expects to produce the first LNG from the fourth train of its Yamal LNG project in northern Russia in the first quarter of 2021, CFO Mark Gyetvay said Dec. 3.

The company had hoped to bring the 0.9 million mt/year train online by the end of 2020, but Gyetvay said the company was still in the "final stages" of the construction.


"We've actually begun parts of the commissioning process and I expect the first production to come sometime in the first quarter of 2021," he said during the World LNG Virtual Summit.


Train 4, which was designed using Novatek's own proprietary technology, will add to the existing 16.5 million mt/year capacity available in the project's first three trains.


"It's good additional volume coming out of the project," he said, adding that the cargoes sold from the fourth train would be destined for the spot market.


He added that Yamal LNG had been operating at over 113% capacity throughout the coronavirus pandemic.


Russian expansion


Novatek has plans to build out an LNG export capacity of up to 70 million mt/year by 2030 as it adds new projects to its portfolio, including the 19.8 million mt/year Arctic LNG 2 which is due to start in 2023.


Russia's new energy strategy published in April includes a lofty forecast for LNG production of 80-140 million mt/year by 2035, which if realized at the top of its range would exceed even the expanded output capacity of LNG powerhouse Qatar.


Gyetvay said Novatek would be the main driver for Russian LNG growth. "I think Novatek will take the lead in this area, and I think if we look post-2030, we can easily be up into 100 million mt of LNG," he said.


Novatek sees its low cost of production as key to its competitiveness in global LNG markets.


Gyetvay said it was possible to deliver LNG into northeast Asian markets for "a little over" $3/MMBtu.


That, he said, was made up of a $0.07/MMBtu cost of feedgas, $0.43/MMBtu of liquefaction costs, plus between $2/MMBtu and $2.50/MMBtu of shipping costs.

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