News Post
Gazprom's Baltic LNG project in port of Ust-Luga needs state support
Gazprom’s new chemical and liquefied natural gas project in the Baltic port of Ust-Luga will be impossible to build without state support, Prime Minister Dmitry Medvedev said.
State development bank VEB later said it would invest up to 111 billion roubles ($1.68 billion) in the project, whose total costs have been estimated by Gazprom at 900 billion roubles.
The Russian sovereign fund and other state banks may also provide financing.
Royal Dutch Shell quit the project earlier this year after Gazprom moved to integrate its Baltic LNG project and gas processing plants and added a partner with links to an ally of President Vladimir Putin.
“It’s big and expensive,” Medvedev said of the Ust-Luga project during a board meeting with state development bank VEB. “The project certainly requires careful attention from the state, taking into account that this project can not kick off without it.”
The investment decision is complicated by Gazprom loss of market share for the first time in at least four years amid a tripling in LNG imports into the region over the past 10 months.
LNG imports into Europe have jumped amid lower than expected spot demand from Asia, which has helped to send European gas prices to 10-year lows and filled European storages to multi-year highs.
Source: Reuters
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