Gazprom aims to speed up new liquefied natural gas (LNG) projects intended to retain or to increase the Company’s share in the global gas market. The Vladivostok-LNG project will be a crucial step in accomplishing this objective.
The project is of great importance for developing the eastern part of the Unified Gas Supply System of Russia and boosting Russian gas supplies to the Asia-Pacific markets, including Japan. Despite the fact that Japan is the world’s fourth largest energy consumer, it has scarce domestic energy resources and is the world’s largest LNG importer purchasing almost 100 per cent of consumed natural gas in the form of LNG.
Under the project an LNG plant with an annual capacity of no less than 15 million tons will be constructed near Vladivostok (Primorye Territory). The first train with an annual capacity of 5 million tons will be commissioned in 2018. The LNG plant will be supplied with gas from the Sakhalin (Sakhalin II and Sakhalin III projects), Yakutia and Irkutsk gas production centers.
In 2005 Gazprom and the Agency for Natural Resources and Energy under the Japanese Ministry of Economy, Trade and Industry signed the Framework Agreement of Cooperation. The document sets forth the key areas of the bilateral cooperation in the gas sector. A Joint Coordinating Committee (JCC) was established to implement the Agreement. A Joint Working Group is operational within the JCC.
In January 2011 Gazprom and the Japanese Agency for Natural Resources and Energy signed the Agreement of Cooperation to prepare a joint feasibility study on the options for natural gas use near Vladivostok as well as for natural gas and gas chemicals transportation from the Vladivostok region and their sales among potential customers in Asia-Pacific countries. The Agreement also specifies the details of the LNG plant construction near Vladivostok.
In 2011 Gazprom together with the Agency for Natural Resources and Energy as well as with Japan Far East Gas Company successfully conducted a preliminary feasibility study on the Vladivostok-LNG project. Based on the study results, Gazprom resolved to compile in 2012 the Investment Rationale for the LNG plant near Vladivostok.
On September 8, 2012 Gazprom and the Agency for Natural Resources and Energy signed the Memorandum on the Vladivostok-LNG project. The document is expected to boost the comprehensive cooperation in order to promote the project, including its financing and gas marketing aspects.
On June 24, 2012 the Russian Energy Ministry and the Japanese Ministry of Economy, Trade and Industry signed the Memorandum of Understanding confirming the intents of the both governments to provide the necessary assistance to the Vladivostok-LNG project.
In March 2012 Gazprom resolved to compile its own Investment Rationale for the project. In February 2013 the Gazprom Management Committee approved the Investment Rationale for the LNG plant near Vladivostok, and the project entered the investment stage.
In March 2013 the Action Plan regarding the LNG plant near Vladivostok was approved as well as the Action Plan regarding the resource base of the project. A special-purpose company was set up for the project implementation purposes.