Gazprom’s investment in Vladivostok LNG plant seen at $13.5 bln

MOSCOW, Nov 21 (Reuters) – Russia’s top gas producer Gazprom is to invest $13.5 billion in its planned liquefied natural gas (LNG) plant near the city of Vladivostok, the local governor said, double the previously stated investment in the project.

Gazprom had previously put investment in the Vladivostok plant at 220 billion roubles ($6.7 billion), though a Gazprom spokesman said on Thursday the new figure also includes infrastructure such as a port, gas pipeline and power station as well as the plant itself.

Gazprom is competing for the upper hand in the global LNG market with rivals including Rosneft and Russia’s No.2 gas producer Novatek.

Competition for LNG exports is growing as Russia plans to lift Gazprom’s monopoly in overseas shipments of the frozen gas. The lower house of parliament has already initially approved a bill to liberalise LNG exports.

Gazprom plans to build the Vladivostok plant by 2018 with a capacity of between 10 and 15 million tonnes per year. Rosneft, jointly with Exxon, wants to launch a 5 million tonnes per year LNG plant on the Pacific island of Sakhalin in the same year.

The governor of the Primorsky region, Vladimir Miklushevsky, gave the new figure on the regional administration’s web site, after meeting with Gazprom Chief Executive Officer Alexei Miller. By comparison, Rosneft and Exxon have earmarked $15 billion for their plant.

According to an industry source, Gazprom has chosen Worley Parsons as contractor for the initial front-end engineering and design for the plant. A spokeswoman at Worley’s Moscow office declined to comment.

Russian President Vladimir Putin has said the LNG business and closer ties with Asian economies should be priorities for Russian companies, as European energy demand sags.

Russia now has a share of around 4.5 percent of the global LNG market, which is dominated by Qatar. Russia aims to double its share by 2020 with the production of between 35 million and 40 million tonnes a year by then.

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