Russian state-controlled gas monopoly Gazprom aims to start building a small scale liquefied natural gas plant in the Perevoznaya Bay near the port of Vladivostok next year.
The plant will supply gas to Russia's growing fleet of LNG-powered vessels, using gas from its Kirinsky offshore block near Sakhalin Island.
Speaking on Tuesday in the island’s capital Yuzhno-Sakhalinsk, department head at the country’s Energy Ministry Alexander Gladkov said that the plant will have annual production capacity of 1.5 million tonnes of LNG and will require investments of about $2 billion.
It will be fed with gas produced by Gazprom at its Kirinsky block and supplied to the liquefaction site via Sakhalin – Khabarovsk – Vladivostok trunk gas pipeline.
The 1800-kilometre pipeline has initial annual throughput capacity of 5.5 billion cubic metres. The gas giant commissioned the system in 2011 but it has been largely underused since then due to slack regional demand.
The plans for the small-scale plant appear to have scuppered Gazprom’s earlier plan to build an LNG plant near Vladivostok that would consist of three trains, each with capacity of 5 MMtpa of LNG.
In June, Gazprom awarded an engineering, procurement and construction contract to complete the development of the Kirinskoye gas and condensate field, the first out of three discovered gas deposits with the Kirinsky block, to privately-held Rusgazdobycha.
Gazprom has committed to pay 51 billion roubles ($800 million) to Rusgazdobycha for the job to drill additional development wells and install subsea well templates to be linked to the existing onshore gas processing facilities by flowlines.
The development completion project is set to bring annual production at Kirinskoye to 5.5 Bcm per year from 700 million cubic metres per year.
Rusgazdobycha is set to work on the project between 2021 and 2023. It will be a first project of such king to the company that is understood to be already in talks with Russian offshore contractor Mezhregiontruboprovodstroy (MRTS) to act as a sub-contractor.
MRTS that is based in Moscow, was a lead EPC contractor for Gazprom at the initial development phase of the Kirinskoye field that was completed in 2013.