Russian largest independent gas producer Novatek has reiterated its request to authorities to arrange state financing for a planned LNG transshipment terminal on the Kamchatka Peninsula in the far east of the country.

In a letter to Vladimir Putin, Novatek executive board chairman Leonid Mikhelson has reportedly asked Russian President to instruct relevant ministries to source an estimated 20 billion rubles ($313 million) for the construction of a berth and supporting facilities at the Bechevinskaya Bay some 75 kilometres from the region’s capital of Petropavlovsk-Kamchatsky, according to Moscow business daily Kommersant.

Russian authorities have repeatedly promised to allocate necessary funding for Novatek’s project by including the expense in the 2020 federal budget.

However, a draft budget for the next year currently being considered by the lower house of the Russian parliament Duma, is understood to lack such line of state spending.

According to Novatek, construction of the Kamchatka LNG terminal has to start next year, for the facility to become operational by 2023 when the company’s second LNG project in West Siberia, Arctic LNG 2, is due to ship its first LNG cargoes.

Earlier this year, Novatek signed an agreement with Japan’s Mitsui O.S.K Lines to join forces in building LNG transshipment facilities on Kamchatka and also near the port of Murmansk in the north of Russia.

Both terminals, each with annual capacity of over 20 million tonnes, are important elements in the Novatek’s plan to remain competitive on the global energy market by reducing shipping costs.

The facilities should reduce voyage time for expensive Arc7 ice-class LNG carriers that Novatek has to order to transport LNG in severe ice conditions in the Russian Arctic region.

A Novatek spokesperson has been quoted as saying that the company hopes the government and Duma will be able to amend the draft budget before it is rubberstamped by parliamentarians.

LNG

Novatek asks Putin to look into Kamchatka terminal