Privately-held Russian investor Alltech is assessing options to sell its two gas fields in the north of its home country that in 2008 appeared to be part of plans to build a liquefied natural gas plant serving the northwest Europe market, writes Vladimir Afanasiev.

Alltech initially expected to sell minority interests in the development, known as Pechora LNG, to international players in expectation that authorities would remove Gazprom's monopoly over gas exports from Russia.

However, unidentified company executives told Moscow business daily Kommersant that Alltech failed to obtain a licence from the government to export LNG to international markets, even after passing a controlling stake of 50.1% in the project to state-run oil producer Rosneft in 2015.

Rosneft created a special subsidiary to push forward Pechora LNG but exited the project in September 2018 after seeing no progress in its efforts to get the LNG export licence itself.

The company also failed to obtain licences for two neighbouring gas fields to potentially expand the project's output.

Recoverable reserves at the Kumzhinskoye and Korovinskoye fields are estimated at 165 billion cubic metres of gas and 41 million barrels of condensate, believed to be sufficient to support a one-train liquefaction facility with capacity of between 4 million and 5 million tonnes per annum.

Gazprom has reportedly raised strong objections against Pechora LNG, saying that its volumes would compete with Russian gas pipeline exports to Europe.

However, the monopoly’s share of the European gas market this year has still declined following LNG imports to the region from the Novatek-operated Yamal LNG development, as well as growing US LNG supply.

Weekly

Alltech looking at options for sale of Pechora gas fields