Former Russian LNG Project to Export Methanol: Press
Two gas fields in Russia's northern Nenets region, once designated as a source of supply for an LNG export project, will now be used to produce methanol instead, Russian business daily Kommersant reported on November 27 citing sources.
Private investor Alltech has sold the Korovinskoye and Kumzhinskoye fields, estimated to hold 160bn m3 of gas, to businessman and former Russian member of parliament Vitaly Yuzhilin and his partners, the newspaper said. The transaction's value is unknown.
The new owners want to produce 2bn m3/year from the fields and transport it via pipeline to a site on the shore of the Barents Sea some 300 km away, where it will be used to produce 1.7mn metric tons/year of methanol for export.
The project is expected to cost rubles 12bn ($160mn), according to Kommersant, with its developers expecting to make a return on this investment within seven or eight years. Production could be increased to 4bn m3/year by 2027 under an additional stage.
Korovinskoye and Kumzhinskoye were previously earmarked as a source of gas for the Pechora LNG project, which Alltech partnered with Russia's Rosneft to develop. But Rosneft exited the venture in 2018, after concluding that there was not enough gas to develop cost-competitive LNG exports. Rosneft and Alltech had earlier hoped to secure rights to two other nearby gas fields but were outbid by Gazprom in a subsoil auction.
Rosneft has long strived to develop LNG like its domestic rivals Gazprom and Novatek, but has so far failed to advance any projects up to a final investment decision. It also has preliminary plans for liquefaction plants in the Far East and on the far northern Taymyr peninsula at its Vostok Oil project.