President Vladimir Putin had previously assured investors that Russia would be seeking new industries so that his country would in the future not be too dependent on energy price swings anymore, having seen the Russian economy go into recession after oil dropped from 100 to 25 dollars per barrel.
But when a project of this magnitude presented itself on the Arctic, which some Russians believe is simply Russian territory all in itself, the Kremlin was quick to invest. And so, a $27 billion liquefied natural gas plant was opened in the snow-covered arctic plains of Russia, as the world’s largest nation in land mass hopes to grow bigger than Qatar in exporting chilled fuel.
As the gas was loaded on an icebreaking tanker in the port of Sabetta on the Yamal Peninsula, Putin declared: “This is a large-scale project for Russia.”
“At the start of the project, people told me not to pursue this. Those who started this project took a risk but achieved a result.”
The site is operated by Russian Yamal LNG company, and co-owned by Russian company Novatek, which holds 50.1 percent of the shares, French company Total, which holds 20 percent of the shares, Chinese company CNPC, which holds 20 percent of the shares and the international Silk Road Fund investment group, which holds the remaining 9.9 percent.
Mr. Patrick Pouyanne, the French chairman and CEO of group Total, stood next to Putin during the speech, and said he admired the project’s “remarkably low upstream costs.”
“Together we managed to build from scratch a world-class LNG project in extreme conditions to exploit the vast gas resources of the Yamal peninsula.”
The projects upstart had been difficult though. The region is covered by ice for most of the year, with temperatures that can drop to minus 50 Celsius in winter.
In order to get the loans for the project, Russia had to borrow from Chinese creditors as US and European banks are still under sanctions orders over the Kremlin’s move against Ukraine.