Construction of the Pechora LNG plant in northwestern Russia may cost state-run oil major Rosneft, the project’s controlling shareholder, and partner Alltech up to $12.5 billion, according to Viktor Okorokov, technical director of Pechora LNG, the project operator. The timeline for the construction remains unclear, so it is yet to be seen when investments will be needed from Rosneft, which is experiencing difficulty in accessing Western capital markets now that it is on the US and EU financial sanctions lists. Rosneft is now looking for up to 2 trillion rubles ($47.7 billion) from state coffers to help mitigate the impact of sanctions, but some observers believe the government will only give Rosneft what it needs to compensate for cash flows rather than to finance ambitious growth projects.
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