Factors of competitiveness of LNG export projects

Abstract

As a result of the development of liquefaction, storage, transportation and regasification technologies, the attractiveness of LNG projects is steadily growing — in some cases, such projects are becoming more competitive than traditional pipeline solutions. The range of solutions for natural gas liquefaction projects is very wide, but low-tonnage LNG provides greater mobility and high speed of project implementation, cause of the usage of the simple low-efficiency technologies. Medium-capacity natural gas liquefaction plants can be built in environment where there are not enough resources to create a large-capacity project, and enable the usage of relatively small and remote fields, including off shore areas. For Russia, an important advantage of medium-tonnage technologies is that they can be developed in a relatively short time. The positive experience of government support for LNG exports in Canada is noteworthy. The government of this state strives to create conditions for environmentally responsible energy production and use, while ensuring the growth of the Canadian economy, as well as the availability of reliable and competitive energy sources and the protection of energy infrastructure. As for the portfolio of orders for Russian projects for natural gas liquefaction, for example, at present, in the Yamal-LNG project, Russian orders account for only 30 %, and the goal is at least 70 %. To achieve this goal, government support is required: concessional lending and tax incentives. For LNG production in the Arctic zone of the Russian Federation, with the support of the state Corporation Rosatom, a bench-testing base for import-substituting equipment is being created in the Nizhny Novgorod region. Government support for LNG projects should also include improving the regulatory framework. Russia is taking an important step towards developing its hydrocarbon reserves in the Arctic. Special attention should be paid to the measures of state support that are provided to exporters in the context of the pandemic, including in the field of LNG sales, in particular, ensuring sustainable lending to the real sector of the economy with the provision of state guarantees and subsidies.