Baltic LNG

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Baltic LNG was a project to build a liquefied natural gas plant on the Baltic Sea in Primorsk, Russia. It was developed by Baltic LNG AG.

1 History
2 Technical features
3 Risks of the project
4 Project company
5 References

[edit] History

Preparations of the Baltic LNG project started in 2004. On 15 October 2004, Baltic LNG AG was registered in Baar, Switzerland (later in Zürich) as a joint venture of Gazprom and Sovkomflot. In 2005 Gazprom started negotiations with Petro-Canada for construction of the LNG plant and for supply agreement to ship LNG to Canadian market. On 14 March 2006, Gazprom and Petro-Canada signed an agreement to proceed with initial engineering design of the Baltic LNG plant. Petro-Canada agreed with plan to ship LNG from the Baltic LNG plant to Petro-Canada's LNG regasification facility in Gros-Cacouna, Quebec.^[1]

In 2006, Gazprom started to look for other markets and partners inviting 17 energy companies from Europe, Asia and North America to negotiations. The decision was expected in 2007, but it was postponed several times. On 21 September 2007 Gazprom decided to continue work on a feasibility of the project, leaving it unclear when it would make a final decision whether to build the plant.^[2] On 7 February 2008 Gazprom announced dropping the project because finding it less competitive than other projects in the region — the Nord Stream pipeline and the possible LNG facility of the Shtokman field.^[3]

[edit] Technical features

The planned capacity of the LNG plant was 5 million tonnes of LNG per year or 7.2 million tonnes per year, depending on whether one or two LNG trains were be built.^[2] The LNG plant was expected to cost US$3.7 million. It expected to become operational by 2012.^[4] The plant was be technically designed by Giprospetsgaz, a subsidiary of Gazprom, and KBR, a subsidiary of Halliburton. The LNG plant was planned to be supplied from the Russian unified natural gas grid, including from the onshore section of Nord Stream pipeline, and from the Shtokman field.

[edit] Risks of the project

Gazprom has identified a number of risks related to the project. According to Igor Meshcherin, head of Gazprom's project evaluation directorate, environmental risks are the congested Gulf of Finland and Danish Straits, and ice conditions. Another risk is that there is not capacity in the unified natural gas system in the St. Petersburg region, and the project might require expansion of the pipeline grid.^[2]

[edit] Project company

The project was developed by Baltic LNG AG, a joint venture between Russian companies Gazprom (80% of shares) and Sovkomflot (20%). The head of the company is Alexander Krasnenkov.^[4] The plan was to involve foreign partner or partners into the project in terms that Gazprom could remain 51% of shares. In 2006, Gazprom had invited 17 companies to take part in the project, of which 15 shown interest. In April 2007, Gazprom shorted list to four companies.^[4] They were expected to be Petro-Canda, BP, Eni and Mitsubishi. In September 2007, media reported that also Spain's Iberdrola was talking with Gazprom about a possible participation in the Baltic LNG project.^[2]