Liquefied natural gas (LNG)

Oil and gas production

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Shale gas

Main article: Shale gas

2024

Construction of many new LNG vessels reduces transportation prices

Ships carrying LNG are being built faster than new supplies of this fuel are coming to market, which helps reduce transportation costs.

The number of LNG tankers in operation in the world as of October 2024

According to ship broker Fearnleys A/S, the cost of a short-term lease of an LNG tanker by October 2024 fell to its lowest level for this time of year since at least 2018.

Typically, rates for LNG transportation increase sharply on the eve of the heating season. However, they have been declining since August

24.3 billion rubles are allocated for the creation of Russian LNG equipment

24.3 billion rubles will be allocated for the creation of LNG equipment until 2030. This was announced on April 4, 2024 by RBC.

The amount of funding became known from the roadmap for the creation of domestic equipment for LNG projects. It will form the basis of an agreement of intent between the government and NOVATEK. Leonid Mikhelson previously announced the lack of state support.

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The agreements between NOVATEK and the state, according to the head of the oil and gas equipment development department of the Ministry of Industry and Trade Khadzhimurat Saadulaev, will be signed on April 5, 2024. It is assumed that participation in the project will be parity conditions, that is, the amount of funding from the government and the company will coincide.

The LNG road map includes a list of 22 critical equipment required by NOVATEK. With success in the development and implementation of these positions, the level of import substitution in the large-capacity production of liquefied natural gas will increase to 80%. In particular, pump equipment is mentioned, as well as a compressor, including compressors of mixed refrigerant and boil-off gas. In addition, the road map covers auxiliary equipment, for example, LNG loading arms and pipeline valves.

The timing and amount of funding for the activities of the roadmap are not final and must be specified during the implementation process. The Ministry of Industry and Trade also plans to connect other corporations to the implementation of the "card," in particular, Gazprom, Rosneft and the Yakutsk Fuel and Energy Company.

The government plans to raise LNG production to 100 million tons by 2030. In 2023, production amounted to 33 million tons. Moreover, by 2035, the goal was set to take a market share of 15-20%, compared with the current 10%.^[1]

Launch of Arctic LNG 2, Russia's largest LNG plant

The Russian Arctic LNG 2 project in February 2024 is ready to export its first cargo.

2023

Reduction of LNG production in Russia by 2.4% to 32.9 million tons

The production of liquefied natural gas (LNG) in Russia in 2023 decreased by 2.4% compared to 2022 - to 32.9 million tons. At the same time, in December, the indicator increased by 5.6% compared to the previous month and reached 3.2 million tons, which was a record value in the history of the Russian gas industry. Such data Rosstat was published on January 31, 2024.

In a situation where the EU countries have sharply reduced imports of Russian gas, LNG production is more justified in terms of export prospects, said Alexander Frolov, deputy general director of the Institute for National power. According to him, the construction of an LNG plant is the same capacity as Nord Stream (55 billion cubic meters). m per year), would cost 5 times more than the pipeline. However, as the expert argues, the plant gives an advantage in mobility: LNG supplies from it can be sent by sea to any country in the world. Although this does not mean that it is necessary to abandon the construction of pipelines: the Russian gas pipeline Power of Siberia, for example, increases China's energy security, since supplies through it cannot be stopped by blocking, for example, the Strait of Malacca, he said.

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According to the Energy Strategy of Russia, by 2035 the production of large-tonnage LNG should increase to 80-140 million tons per year, the press service of the Ministry of Energy said. They recalled that by 2023, LNG plants with a total capacity of about 33.3 million tons per year were operating in the country, and it is also planned to launch several more projects. At the end of 2023, the Ministry of Energy expected an increase in LNG production in Russia by 2% to 33.6 million tons.

The ministry adds that to stimulate the development of the LNG industry in 2023, several state support measures continued to operate, including a zero MET rate for LNG projects on the Yamal and Gydan peninsulas, as well as a zero export duty.^[2]

US becomes world's biggest LNG exporter for first time

The US has become the world's largest LNG exporter for the first time, with shipments bypassing Australia and Qatar in 2023.

Russia sharply increased LNG supplies to India and Turkey

The export of Russian liquefied natural gas (LNG) to Turkey in 2023 increased 1.4 times compared to 2022 and reached 814,000 tons. Supplies to India increased 1.5 times to 432,000 tons. Kpler analysts presented such data in mid-January 2024. Read more here.

LNG exports from Russia decreased

In 2023, Russian plants produced 32.33 million tons of liquefied natural gas (LNG), which is 2% less than a year ago. The total volume of LNG exports decreased by the same 2%, although separately in December 2023 it turned out to be the maximum for the year and 7% more compared to the last month of 2022. Such data analysts Kpler published in January 2024. Read more here.

LNG exports increase greenhouse gases and Earth temperatures more than coal burning

In 2023, unexpectedly for suppliers of liquefied natural gas (LNG), publications related to the topic of a real assessment of "environmental" efforts began to appear in the scientific community. USA Robert W. Howarth, a specialist in the Department of Ecology and Evolutionary Biology at Cornell University, presented the work 'Greenhouse Gas Footprint in the Export of Liquefied Natural Gas (LNG) from the United States.

In his study, Robert W. Howarth looks at the effects of greenhouse gases such as SO2 and methane on enhancing the greenhouse effect. CO2 is generated by burning fossil fuels, and methane emissions are linked to both its production and transportation.

Howarth's findings are disappointing. Although some proponents of LNG argue that replacing it with coal is beneficial to the climate, the analysis presented by the researcher refutes this. In all scenarios considered, total greenhouse gas emissions from LNG are greater than from coal and range from 24% to 274%.

In fact, an American scientist destroys the myth of the imaginary environmental friendliness of LNG. Until 2016, the United States had a ban on LNG exports. After that, exports began to grow rapidly, including due to a significant increase in shale gas production. Currently, the United States occupies the position of the largest global exporter of LNG. The study provides a comprehensive assessment of LNG-related greenhouse gas emissions throughout the process chain - from gas production to transportation to end users.

The magnitude of these emissions depends on the type of ship used to carry the LNG. Older tankers with engines using heavy fuel oil make a significant contribution to emissions. The main source of emissions in such cases is the release of methane during evaporation, the so-called boiling, from tanks (boiling is the process of evaporating part of the gas during transportation, which is necessary to maintain the low temperature of the entire LNG cargo). By contrast, more modern tankers equipped with 4-stroke or 2-stroke engines have the ability to capture and recycle boil-generated methane to generate electricity, resulting in significant reductions in methane emissions.

When transporting LNG by modern tankers, the main source of emissions is the production, processing, storage and transportation of natural gas, which is the raw material for LNG. Volatile emissions of unburned methane, as well as carbon dioxide emissions resulting from energy-intensive processes associated with modern shale gas production, play an important role.

Ministry of Industry and Trade approved a strategy for import substitution of LNG technologies

Ministry of Industry and Trade approved a strategy for the development of the manufacturing industry, which, among other things, refers to the import substitution of technologies in the field of liquefied natural gas. According to Interfax"" with reference to the representative of the department, by 2030 it is planned to bring the share of domestic equipment in this market to 80%.

The approved document provides for a plan to increase the volume of domestic production of oil and gas equipment as a whole to 375 billion rubles by 2024, to 487 billion rubles - by 2030, to 490 billion rubles - by 2035.

The Ministry of Industry and Trade approved a strategy for import substitution of technologies in the field of liquefied natural gas

At the same time, the share of Russian equipment in the structure of the oil and gas business over this period should increase from 70% to 90%, including due to the development of domestic solutions for geological exploration and the extraction of hard-to-recover gas reserves.

Earlier, the Government of the Russian Federation allocated 1 billion rubles for the provision of subsidies to Russian organizations for financial support of R&D costs for the implementation of projects under the Breakthrough to LNG Markets program. In 2022, at least 2 billion rubles were provided for the creation of draft designs for equipment for medium and large-capacity production of liquefied natural gas, taking into account the implementation of equipment produced within the framework of the created sketches by 2028.

The dependence of the Russian industry, especially large-capacity LNG, on foreign technologies and equipment is quite high, "says Alexey Gromov, Chief Energy Director of the Institute for power and Finance. - According to the main processes, Russian companies are completely dependent on imported technological solutions, and this was clear back in 2014. Everyone understood that it would be very difficult to quickly develop domestic analogues of one Russia in the LNG segment. Therefore, the imposed sanctions are a serious blow to the Russian liquefaction industry. Given that we have not fully purchased equipment for projects already under construction, these sanctions will at least postpone the implementation of new plants.[3]

Russia began to deliver LNG to China by trucks

The first tank container with liquefied natural gas (LNG) was sent along the Blagoveshchensk-Heihe international automobile bridge to China. This was announced on August 2, 2023 by the press service of Gazprom. Read more here.

Creation of LNG technology with a capacity of one train of 6 million tons of gas per year

On June 13, 2023, Novatek announced the creation of a large-capacity technology for liquefying natural gas (LNG) based on mixed refrigerants. The patented development was called the Arctic Mix. Read more here.

Record LNG deliveries at the beginning of the year

2022

Novatek in 2022 increased its share in the global LNG market

Novatek's share in the global liquefied natural gas (LNG) market in 2022 increased to 5.4%. This is stated in the statements that the company published in early April 2023. Read more here.

8.1% increase in production to 32.5 million tons

The production of liquefied natural gas (LNG) in Russia in 2022 reached a record 32.5 million tons, an increase of 8.1% compared to 2021. This is evidenced by Rosstat data.

At the same time, in December, the indicator decreased compared to the same month in 2021 - by 4.8%, to 2.8 million tons. According to Interfax, citing materials from the department, in the total volume of Russian LNG production, 11.5 million tons fell on the Sakhalin-2 project plant.

LNG production in Russia for the year updated the record

In the Russian Federation, large-tonnage LNG is produced by Sakhalin Energy plants (co-owners - Gazprom, Mitsui and Mitsubishi), as well as Yamal LNG (participants - Novatek, TotalEnergies, Chinese CNPC and SRF).

LNG is also produced by Gazprom's medium-tonnage plant at the Portovaya compressor station, Kriogaz-Vysotsk LLC (Novatek and Gazprombank JV, Gazprom Transgaz St. Petersburg LLC, Gazprom Transgaz Yekaterinburg LLC, Novatek-Chelyabinsk LLC and others.

The development of liquefied gas production over the past few years by 2022 has become one of the key strategic tasks of the economy in Russia. The relevant plans are reflected in the long-term development program for the LNG industry approved by the government in March 2021. According to the document, Russian gas liquefaction capacities will grow to 65 million tons by 2024 and to 140 million tons by 2035. In addition, the program involves the expansion of the use of Russian technologies for liquefying natural gas and equipment, the development of medium and large-capacity production facilities, the creation of LNG clusters and gas chemical production facilities. The increase in LNG production will also encourage the use of LNG as a motor fuel. As Prime Minister Mikhail Mishustin reported, this will be facilitated by the creation of attractive conditions for investors.^[4]

Mishustin allocated 6 billion rubles for the development of equipment for gas liquefaction and chemical production

At the end of September 2022, Prime Minister Mikhail Mishustin signed an order that allocated about 6 billion rubles for the development of equipment for liquefying gas and producing chemical products. According to the Cabinet, research and development work will be financed to create domestic equipment for liquefying gas, as well as the production of various goods and products based on chemical technologies.

Subsidies from the reserve fund of the Cabinet of Ministers will be provided to Russian companies implementing such developments. At the same time, 2 billion rubles will be spent on the creation of prototypes of equipment for the production of medium and large batches of liquefied natural gas (LNG), and 4 billion - on the development of technologies for the production of chemical products.

Mikhail Mishustin

Among the LNG equipment to be developed and tested by Russian manufacturers are an electrically driven feed gas booster compressor, parts of carbon and stainless steel pipelines, high-capacity process centrifugal pumps and other devices. In total, in 2022, work will begin on the implementation of 11 such projects. In the future, this will increase the volume of liquefied natural gas production. According to plans, by 2035 the indicators should grow to 80-140 million tons per year.

In addition, at the expense of federal funding in 2022, the implementation of 30 projects for the production of products, which are based on modern chemical technologies, will begin. We are talking, among other things, about artificial inulin and textile heat-resistant fibers. Also, the country will establish the production of higher fatty alcohols, lactic acid, lysine, citric acid, amino acids and other chemical products. Now these substances, widely in demand by various industries, are purchased abroad.

In general, it is planned to launch production of products for the allocated 6 billion rubles, the sales volume of which will be at least 12 billion rubles.^[5]

Mishustin instructed to allocate 1 billion rubles for the development of LNG equipment

The Russian government will allocate 1 billion rubles for research and development (R&D) to create equipment for liquefying natural gas, Prime Minister Mikhail Mishustin said at a cabinet meeting on August 17, 2022. Read more here.

Novatek began to create an LNG plant on Russian equipment

At the end of May 2022, Novatek began pre-project work on the construction of a natural gas liquefaction (LNG) plant, which will be located on the basis of the Ob Gas Chemical Complex. It is claimed that Russian production equipment will be used at this enterprise. Read more here.

Qatar is the largest LNG supplier

In April 2022 Qatar , he took USA the crown of the world's largest exporter of liquefied natural gas.

Growth in US LNG exports to Europe

Geography and dynamics of US LNG exports

2021

The largest exporters of liquefied natural gas in the world

The largest participants in the LNG market for 2021 are:

• Australia (108 billion cubic meters of exports for the year),
• Qatar (107 billion cubic meters),
• USA (95 billion cubic meters),
• Russia (40),
• Malaysia (33.5),
• Nigeria (23.3),
• Algeria (16.1),
• Oman (14.2) and
• Indonesia (14.6),

which together account for 87.5% of the global market.

The largest exporters of liquefied natural gas (LNG) in 2021

China prepares to remove Japan from 1st place in LNG imports

2020

Russia overtook the United States for the first time in terms of LNG supplies to Europe - 22 million tons against 20 million tons

At the end of 2020, Russia for the first time overtook the United States in the supply of liquefied natural gas (LNG) to Europe. This was announced by the head of the Shell concern in Russia Sederik Kremers at the presentation of LNG Outlook 2021. Read more here.

Total has started supplying zero-carbon gas

In mid-October 2020, the French oil and gas company Total announced that it had begun supplying zero-carbon liquefied natural gas (LNG). The first batch was received by the Chinese state-owned oil and gas corporation China National Offshore Oil Corporation (CNOOC).

Total is the second largest private global LNG player. The Company has representatives at all stages of the LNG value chain, from natural gas production and liquefaction to LNG shipping, trading and regasification using terminals and floating regasification storage facilities. Loading of the batch was carried out at the Ichtis gas liquefaction plant in Australia, and on September 29, the batch was already delivered to the Dapeng terminal in China. The company noted that carbon emissions were offset along the entire value chain.

French oil and gas company Total starts supplying zero-carbon gas

This means that the carbon footprint from the batch, which includes extraction, liquefaction, shipment, regasification and end-use of fuel, has been offset by a reduction in the equivalent amount of greenhouse gases emitted elsewhere. This was achieved through projects certified by the Verified Carbon Standards (VCS) program: China's Hebei Guyuan Wind Power Project and Zimbabwe's Kariba REDD + Forest Protection Project.

We are proud to have conducted the first delivery of zero carbon liquefied natural gas along with CNOOC, a longtime partner of Total, "said Laurent Vivier, President of Total. He recalled that the development of the LNG supply chain is necessary to meet the growing global demand for energy and at the same time reduces the carbon intensity of consumed energy products.[6]

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