State-controlled gas monopoly Gazprom is planning a major revamp of its long-discussed Baltic LNG project in the port of Ust-Luga in the northwest of Russia because more capacity is now available in the pipeline network through which it can receive gas supplies

According to the company, instead of building a liquefied natural gas facility alone, a multi-purpose plant is now planned on the 1400-hectare land plot that Gazprom has already leased in the southern part of the port.

Gazprom said that it could invest up to 700 billion roubles ($10.8 billion) to ultimately produce about 13 million tonnes per annum of LNG, plus up to 4 million tpa of ethane and up to 2.2 million tpa of liquefied petroleum gas.

Under the plan, the first phase of the facility expected to be completed by the end of 2023, with the second phase coming online by end of the following year.

To enable the project, Gazprom is expected to undertake major conversion within its pipeline network that links Ust-Luga with the Nadym-Pur-Taz region in West Siberia, which hosts its core fields where the company produces mostly dry gas from shallow Senoman formations.

Parts of the network will have to be isolated to be able to transport wet gas that Gazprom expects to produce from deeper and higher-pressured Achimov and Valanzhin formations in these regions, to Ust-Luga.

Industry analysts in Moscow said that the conversion is feasible because existing links between Nadym-Pur-Taz and the northwest of Russia consist of several parallel pipelines.

Some of them will stop to be used in next several years as Gazprom’s core production centre is gradually moving from the Nadym-Pur-Taz region to the Yamal Peninsula which is served by a newer, independent pipeline network in the north of the country.

According to the Gazprom’s plan, the proposed facility at Ust-Luga will process a total of 45 billion cubic metres of wet and dry gas per year, and return some 20 Bcm of dry gas from that total into the domestic trunk pipeline system as ethane and other wet gases are separated from the mix.

Gazprom did not say if it still plans to involve Anglo-Dutch supermajor Shell, which has been working jointly with the gas monopoly on a feasibility and technical concept for the Baltic LNG, in the new scheme.

However, the gas giant did say it will be partnered by privately held Rusgazdobycha, a company controlled by Russian businessman Arkady Rotenberg, who was sanctioned by the US and Europe in 2014 over his alleged ties to President Vladimir Putin.

Gazprom said that both companies will have equal stakes in Ruskhimalyans which will be appointed the operator of this new project.

According to the gas giant, Rusgazdobycha will invest its own funds to build and operate a petrochemical facility near Ust-Luga that will process ethane to produce over 3 million tonnes of polymers per year.

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Gazprom emerges with new plan for Baltic LNG