First crack in Gazprom monopoly

In LNG, Gazprom is being challenged by both Novatek and Gazprom. Photo: Thomas Nilsen

Gazprom’s two biggest competitors in Russia, Novatek and Rosneft, will both be allowed to export LNG from their Arctic fields, the Russian Ministry of Energy decides.


Minister of Energy Aleksandr Novak confirms that both the two companies will be allowed to export LNG. However, the permission will not include the European market where Gazprom is to remain in exclusive monopoly position, Vedomosti reports.

As previously reported, Novatek owners Leonid Mikhelson and Gennady Timchenko have both strongly lobbied their company’s intention to export LNG. Along with Total, the company is developing the Yamal LNG plant, a giant project on the eastern coast of the Yamal Peninsula. The plant, which is to stand ready in 2016, is expected to alone boost Russia’s production of LNG from the current 11 million tons to 27,5 million tons.

Recently, also Rosneft leader Igor Sechin confirmed his company’s interest in engaging in production and exports of LNG.

Gazprom has until now had a total monopoly on all gas exports, both conventional pipeline gas and LNG.

When completed, the Yamal LNG plant and adjacent Sabetta port will be able to deliver year-round LNG to the world markets, major parts of it shipped east-bound along the Northern Sea Route. Until now, Novatek has planned to export the gas to South American, Asian, as well as European, markets.

Recently, the company informed that it had concluded 80 percent of all export contracts in the project and that as much as 50 percent of the LNG deliveries were to be made to the European market, reports.