Russian President Vladimir Putin is watching the launch of a 27 billion-dollar gas factory in the snow-covered tundra in northern Siberia. His thoughts, however, are far from there on almost 5,000 kilometers – in Qatar. The two regions have a radically different climate, but Putin wants the Arctic to compete with fuel that has made Qatar one of the richest countries in the world per capita. Today, he will attend a ceremony on loading a specially built ice tanker from the Yamal plant in a region that potentially has more gas than in the Persian Gulf.
Operator Novatec earlier this week announced the start of production, which also includes Total SA, China National Petroleum Corp. and the Chinese Silk Road Fund. The plant started working on time and within the budget – something that is rather an exception in the industry.
Russia is the largest gas exporter and has for decades relied on gas pipelines to Europe as a major source of revenue. It is now aiming to build plants from the Baltic region to the Pacific Ocean and deliver to the rest of the world.
Putin has also taken steps to support the industry, such as ending Gazprom’s monopoly and exempting tax exports. The reliefs make Arctic gas competitive on every market in the world – due to high transport costs. The Yamal LNG plant is operated by Novatec, which holds 50.1%, while other shareholders are Total (20%), and Chinese partners (29.9%).
Arctic gas projections are for over 70 million tons of gas per year year, almost reaching the current capacity of Qatar. Yamal will have a capacity of 5.5 million tons per year. First supplies will go to China – in recognition of the support.