Privately held Russian company Globaltek has awarded a front end engineering and design (FEED) contract for its Yakutia LNG project to a consortium of Japan’s JGC Corporation and Norway’s Aker Solutions.

Globaltek said in a statement that it selected the consortium against two other bidders - Technip Energies and McDermott - as JGC and Aker had submitted proposals to “optimise [the] construction process” and costs during the bidding process versus their rivals.

Globaltek expects the FEED study to be completed within the next two years, with the final investment decision on this ambitious project expected in 2023 and the construction of the planned liquefied natural gas plant and a connecting gas pipeline to start soon after.

Commissioning of the first liquefaction train is scheduled for 2027, the company added.

Globaltek, together with gas and condensate producer Yatek in the Yakutia republic in East Siberia, are controlled by Russian businessman Albert Avdolyan, with another company under his control, A-Property, set to provide management and overseeing services to the LNG project.

Yakutia LNG will consist of at least two phases with ultimate annual production capacity of 18 million tonnes of LNG. The project will utilise feedstock gas to be produced by Yatek at its blocks in Yakutia, which will be sent by a dedicated pipeline to the far eastern coast of Russia for liquefaction and export.

Plans show that the liquefaction trains will be installed on top of floating concrete gravity structures to be towed to their final location in the far east of the country.

Some 11 million barrels of condensate from Yakutia are also planned to be exported to Asia Pacific from the project, according to A-Property.

Export restrictions

Yatek executive director Andrey Korobov said recently that the gas producer is talking to state-controlled gas monopoly Gazprom and the nation’s Energy Ministry to overcome legal regulations that currently permit only Gazprom and selected exempted operators to export LNG from Russia.

According to Korobov, Gazprom holds a licence for a large block in Yakutia, with Yatek hoping the monopoly might be interested in using its planned export pipeline and LNG plant to commercialise gas from this tract.

Korobov said alternative ways to gain access to export markets include the signing of a long-term agreement with Gazprom to employ the monopoly as an intermediary in LNG exports, or applying to the government for an exemption from regulations.

A spokesperson for A-Property told Upstream that the company “is actively working on the [LNG export] legal solution”.

Reserves challenge

Another challenge to overcome is the lack of sufficient gas reserves under Yatek's control in Yakutia, with the company having to invest heavily in the exploration of three recently acquired blocks to get them to development phase by the start-up of the first train.

According to Korobov, Yatek has about 432 billion cubic metres of recoverable gas reserves at its legacy fields and blocks in the region, with 67 Bcm of gas added since 2019.

However, the producer has to increase total recoverable reserves under its control to over 1 trillion cubic metres to underpin the full capacity of the planned LNG plant, capable of processing at least 28 Bcm of gas annually.

According to Korobov, some 6900 kilometres of 2D seismic have to be collected on the three new tracts - Severny, Yuzhny and Maysky - that together cover the area of about 43500 square kilometres. Only then does the company plan to move forward with 3D seismic and exploration drilling.

Meanwhile, Yatek has prioritised re-testing of old idle wells and exploration drilling at its legacy blocks in Yakutia to add more reserves to its portfolio.

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