LNG

July 10 (LNGJ) - Indian Prime Minister Narendra Modi has ended a visit to Russia and a statement said that both countries were exploring the possibility of expanding cooperation in the natural gas sector and India would continue to import around 3 million tonnes per annum of Russian LNG and the volumes could be increased.

   It was also stated that the Indian state-owned company, Oil and Natural Gas Corp. (ONGC), is maintaining its participation in the Sakhalin 1 oil project in the Russian Far East while the choice of a new operator of the joint venture was now underway after the withdrawal of US major ExxonMobil Corp.

Gazprom, the Russian natural gas company impacted by sanctions after the invasion of Ukraine in 2022, is trying to rebuild its business by signing deals for gas transportation exits via the three Central Asian former Soviet states of Kazakhstan, Uzbekistan and Kyrgyzstan as well as its neighbour across the Black Sea, Turkey.

Gazprom has just signed contracts with Kazakhstan for gas transit to Uzbekistan and Kyrgyzstan.

The documents were signed at the St. Petersburg International Economic Forum held by the Russians.

Gazprom has ambitious plans to ramp up gas supplies to Central Asia and Turkey.

The company aims to deliver significantly larger volumes via the Central Asia-China Pipeline for 15 years starting in 2025. 

The Central Asia-China pipeline is a network of natural gas pipelines that transport natural gas from Turkmenistan, Kazakhstan, and Uzbekistan into China.

With a 55 billion cubic metres capacity, the same as the now defunct Nord Stream 1 pipeline from Russia to Germany, the 1,833-kilometres (1,140 miles) Central Asia-China Pipeline presently comprises three sections (Lines A, B, and C), running from Turkmenistan through Uzbekistan and Kazakhstan to China’s Uygur Xinjiang Autonomous Region.

From there, the pipeline links up with the West-to-East Gas Pipeline in China, underscoring its significance in regional energy dynamics.

Gazprom added that it had also signed a contract for the supply of gas to the north and south of Kyrgyzstan.

Larger volumes

In addition, Gazprom and Kazakhstan signed an action plan to prepare gas facilities in Central Asia to increase the transportation of Russian gas to Uzbekistan.

In June 2023, Uzbekistan concluded a two-year gas purchase agreement with Gazprom.

The daily supply volume is 9 million cubic metres and the annual volume is almost 2.8 billion cubic metres and deliveries started in October 2023.

From November 2025, Gazprom said it planned to begin supplying “significantly larger volumes” covered by 15-year contracts with Kyrgyzstan, Kazakhstan and Uzbekistan.

In February 2024, it was reported that the government of Uzbekistan intends to upgrade the republic’s main gas system in order to increase gas imports from the Russian Federation by 3.5 times from 9 million cubic metres per day to 32 mcm per day.

BOTAŞ venture

Turkish Energy Minister Alparslan Bayraktar was also at the Russian Forum and said the Turkish Petroleum Pipeline Corporation (BOTAŞ) planned to set up a joint venture company with Gazprom as part of a plan to establish a hub in Turkey for selling natural gas.

“Significant work has been done in recent years to establish a natural gas trading centre in Turkey,” said Bayraktar.

“We are now planning to establish an operating company in partnership with BOTAŞ and Gazprom in Istanbul,” he added.

“In the coming months, we would like to carry out concrete work and realise the gas hub project,” stated Bayraktar.

Exports of Russian liquefied natural gas cargoes from the Yamal plant in northern Siberia and the Sakhalin plant in Russia’s Far East declined only slightly in the past year as Moscow also adapted its oil export policies under the OPEC+ regime as well as to cope with Western sanctions over Ukraine.

Gazprom, the Russian pipeline natural gas giant and LNG producer, said it was working to boost liquefaction capacity at various sites to match the Sakhalin LNG export plant in the Far East, particularly at the Ust-Luga plant in the Gulf of Finland.

Russian natural gas giant Gazprom has found another outlet for its resources stranded by Western sanctions over the war with Ukraine by signing new supply deals with the Central Asian republics of Uzbekistan and Kazakhstan.

Gazprom signed an agreement with Uzbekistan to supply gas volumes and also signed an accord with Kazakhstan’s QazaqGaz to provide services for the transportation of Russian natural gas through Kazakhstan to customers in Uzbekistan while also promising more volumes to the Kazakhs.

The two-year agreement will provide 9 million cubic metres per day, or around 2.8 billion cubic metres per annum, of pipeline natural gas to Uzbekistan.

Oil focused

Uzbekistan is an oil and natural gas producer, though its output leans mostly towards oil.

The overall deal is for the transit of 6 Bcm of gas annually, which implies that other Central Asian countries may also come to import more Russian gas via this route.

The details of the natural gas supply deal were revealed on October 7 at a ceremony attended by Russian President Vladimir Putin, Uzbekistan President Shavkat Mirziyoyev and Kazakhstan President Kassym-Jomart Tokayev.

The search for new pipeline gas customers by Gazprom has continued after Western sanctions on pipeline gas to Germany and the European Union, though there were no specific sanctions on LNG and cargo deliveries continue.

The Gazprom-operated Sakhalin LNG plant in the Russian Far East lost Shell as a shareholder but Japanese shareholders remained on board as they rely on the more than 9 million tonnes per annum of deliveries to Japanese terminals.

Kazakhstan is the largest southern neighbour of Russia in Central Asia and Uzbekistan lies to the south of Kazakhstan.

There is also a Central Asian natural gas pipeline in the region that is connected to China and supply flows to the Chinese are increasing year-on-year,

China pipeline

The pipeline supplying the Chinese from the west originates on the Turkmenistan-Uzbekistan border and passes through Kazakhstan on the 3,665 kilometres (2,277 miles) route to Horgos in the Xinjiang region of China.

A statement on the Gazprom deal with Uzbekistan and Kazakhstan said that the “blue fuel” from Russia would be sent to Uzbekistan via Kazakhstan, with a share of it also going to Kazakhstan. 

“Firstly, this is an important factor in the energy security of our country and the entire region. Secondly, the supply will provide for additional volumes of gas for the uninterrupted supply to economic sectors and the population,” said the President of Uzbekistan Shavkat Mirziyoyev.

According to Mirziyoyev, the implementation of this project was a “vivid example” of successful mutually beneficial cooperation between Russia, Kazakhstan and Uzbekistan in the energy sector.

“The implementation of this project will have obvious benefits for all three countries. Uzbekistan will get an additional source of energy, allowing it to guarantee an uninterrupted supply of heat and electricity to households and socially important facilities. Kazakhstan will be able to solve the issue of gasification of its northern and eastern regions,” said Gazprom 

Indian liquefied natural gas imports jumped by 10 percent as lower prices helped encourage buyers while domestic gas output also increased along with the nation’s gas demand.

Russian natural gas company Novatek has plans to start commercial shipments from the Arctic LNG II project in mid-January 2024 and would likely send three to five cargoes per month eastwards to the Asian market, including China, while Russia’s Sakhalin LNG plant in the Far East has re-started after scheduled maintenance.

Novatek, the Russian operator of the Yamal LNG export plant in Northern Siberia and the developer of the Arctic LNG II venture scheduled to start up in late 2023, is continuing to function despite sanctions over Ukraine and has just accepted a Russian patent for LNG processing in Arctic plants.

Spain increased its imports of Russian liquefied natural gas in 2022 despite Western sanctions over the invasion of Ukraine and with only the UK out of leading European importers voluntarily ending LNG cargo deliveries from Russia and later joined by the Baltic nation of Lithuania.

Spain, France, the Netherlands have continued to receive LNG cargoes, which are not on the formal Western sanctions list.

The shipments to Spain and other European Union nations mostly come from the Yamal LNG export plant in northeast Siberia and operated by Russian natural gas company Novatek.

Latest Spanish data showed that 12.6 percent of Spanish natural gas was imported from Russia in the form of LNG and regasified to enter the state gas grid or re-exported to other EU nations.

With the start of the war in Ukraine in February 2022, energy supplies from Russia collapsed with oil accounting for just 1 percent of Spanish imports and with only LNG surviving as a seemingly essential Russian commodity.

Regarding LNG imports, the data showed that Spain received 56,021 gigawatt hours (GWh), or 4.24 million tonnes, of LNG from Russia in 2022, which was 54.8 percent more than in 2021 when it imported 37,027 GWh, or 2.80MT of LNG.

Rise in deliveries

As a consequence, Spain’s share of LNG shipments from the Russians increased by 3.7 percentage points in 2022 from 8.9 percent to 12.6 percent.

The data showed that Russia remained the fourth largest natural gas supplier to Spain after LNG deliveries from the US, pipeline natural gas from Algeria and LNG cargoes from Nigeria.

In the last month of 2022, Russian deliveries from the Yamal plant to northwest Spain and other Spanish ternminals surpassed LNG deliveries from Nigeria and consolidated itself in third place.

This meant that in the month of December, 5,453 GWh, or 414,400 tonnes, of LNG were received by Spain from Russia .

This increased the December cargo volumes of Russia’s LNG received by Spanish terminals to 14.3 percent of the total.

The LNG deliveries contrasted with the shipment of oil cargoes to Spanish refineries.

Russia exported 698,000 tons of crude oil to Spain in 2022, which was 72.8 percent less than in 2021 when 2.6 million tons were received.

In this case, Russia’s share of crude deliveries to Spain fell from 4.6 percent of the total to 1.1 percent.

After this collapse, Russia’s became Spain’s 17th largest oil supplier, down nine places from 2021.

Uniper, the German utility that was saved from bankruptcy by Germany’s Federal Government after the halting of Russian pipeline gas supplies, has imported its first US LNG cargo to the floating import facility at the North Sea port of Wilhelmshaven.