Russian gas giant Gazprom asks Kremlin for money for two projects

The Russian gas monopoly Gazprom has asked the Kremlin to provide financial assistance for a gas chemical complex and a liquefied gas processing complex that it plans to build close to the port city of Ust-Luga, Vedomosti reports, citing a letter from Gazprom CEO Alexey Miller to Russian Prime Minister Dmitry Medvedev.

According to the newspaper, the letter was sent at the end of May. In it, Miller asked that the projects be given the status of “national importance for the economy”. He requested that the financing of the projects be discussed by the supervisory board of VneshEconomBank (VEB). He also asked for a subsidy from the Finance Ministry.

Medvedev has subsequently sent a resolution to Finance Minister Anton Siluanov and VEB chair Igor Shuvalov instructing them to prepare an offer.

The newspaper notes that Miller did not specify the requested subsidy amount or how much the projects are expected to cost. The document also did not suggest which funds should be used for the subsidy.

“We will not comment, of course,” said Gazprom spokesperson Sergey Kupriyanov when asked about state support for the Baltic Liquefied Natural Gas project.

In April 2018 it was learned that Gazprom intends to build a major gas chemical complex for exporting gas to Europe. The complex will consist of liquefied gas plants and a gas chemical company. The project will be operated by RusKhimAlyans, an equally owned joint enterprise between Gazprom and its partner for the project, RusGazDobycha.

At the end of March, Gazprom announced that the project would require more than 700 billion rubles (around $10.5 billion) in investments. The first part of the complex is scheduled for completion by 2023 and the second for the end of 2024. At the time, the energy company estimated that the project would yield more than $4 billion per year in profit.

In May 2017, Gazprom and RusGazDobycha signed a memorandum to cooperate on these projects. Before that, in summer 2016, the companies agreed to collaborate on the development of three gas fields in Yamal.

  Gazprom, Russia, Kremlin