Russia is already among the world’s biggest oil and piped gas exporters, but this month’s launch of Yamal LNG underscores its ambitions to become one of the top LNG exporters, too. The proj- ect, the country’s second liquefaction scheme, is the first in a cluster planned by private sector Novatek in the Russian Arctic. State-owned Gazprom also has a few projects up its sleeve, including an expansion of Sakhalin-2 in the Russian Far East, but the Kremlin seems to be bet- ting on Novatek to turn Russia into an LNG producer rivaling Qatar, the US and Australia. By 2030, Novatek claims it will have liquefaction capacity of up to 57 million tons per year, accounting for two-thirds of Russian output, which is expected to top 80 million tons/yr by then. The Kremlin views the projects as the catalyst for developing the strategically important Arctic region — a point President Vladimir Putin underlined during the launch ceremony for the 16.5 million ton/yr Yamal LNG at the Arctic port of Sabetta on Dec. 8. Future Novatek projects are expected to receive the same tax breaks, including zero gas extraction and property taxes, and lower income tax. Moreover, LNG, unlike piped gas, is not subject to export duties under Russian law. The Kremlin also provided $2.3 billion in financing for Yamal LNG after the project had trouble raising money due to US sanctions against Novatek, and further supported the scheme by building an airport and sea port at Sabetta.
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