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Russia to finance Gazprom's Baltic Ust-Luga project after Shell pulls out

Russia will use the National Wealth Fund to finance Gazprom's new chemical and liquefied natural gas project in the Baltic port of Ust-Luga, Deputy Finance Minister Andrei Ivanov said. Gazprom said the project would require equipment purchases of at least 900 billion roubles ($13.87 billion). This March, Gazprom changed the project concept to include the full integration of Baltic LNG and a gas processing plant.

Gazprom mentioned only one partner in the new version of the project: RusGazDobycha, which is partially owned by the National Gas Group. The jointly owned company RusKhimAlyans will be the project’s operator. No involvement on the part of Shell was mentioned.

Gazprom had initially planned to build only an LNG plant in the area with Royal Dutch Shell. It changed its mind earlier this year and redesigned the project to add a chemical plant, prompting Shell to leave the project.

The British-Dutch company Shell plans to withdraw from the Baltic liquefied natural gas (LNG) project following Gazprom’s decision to integrate it with a gas processing plant in Ust-Luga, announced

“Following Gazprom’s announcement on 29 March regarding the final development concept of Baltic LNG, we have decided to stop our involvement in this project. We have a number of other ongoing projects with Gazprom, including as part of the Strategic Alliance established between the two companies in 2015, which are not impacted by this decision,” Shell Russia Chairman Cederic Cremers announced in statement.

In 2015 Shell became Gazprom’s sole partner in Baltic LNG. The technical development of the project began in 2018. Initially, Shell assessed the plant’s capacity at 10 million tons of LNG per year, with a possible later expansion to 13 million tons.


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