Monday, September 22, 2014

“Rosneft” found a way to offset the costs of “Far East LNG” – RBC

"Rosneft" found a way to offset the costs of "Far East LNG" – RBC

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RBC became known one of the working versions of the state support of “Rosneft”. It invites the Government to plant construction project “Far LNG” in the project “Sakhalin-1″. In this case, the production sharing agreement will have to compensate the State Oil Company of the costs of its construction and related infrastructure. They are estimated at up to 1 trillion rubles.

The inclusion of “Far East LNG” in the project “Sakhalin-1″ and prepared “Rosneft” a draft government resolution was considered on August 20 at a meeting in charge of Energy Vice Prime Minister Arkady Dvorkovich (RBC able to familiarize themselves with the draft resolution). According to the explanatory memorandum to the draft regulations, the cost of construction of the “Far East LNG” infrastructure can be up to 500 billion rubles., Along with associated gas production projects – up to 1 trillion rubles. The document notes that revenues could reach 400 billion rubles.

Construction of “Far East LNG” in the south of Sakhalin (entering the first stage of 5 million tonnes per year is scheduled for 2018) – a joint project of “Rosneft” and the American ExxonMobil. In the offshore project “Sakhalin-1″, which is implemented under the terms of a production sharing agreement (PSA), there are two participants – Japanese Sodeco and Indian ONGC.

If the construction of the “Far East LNG” include the PSA “Sakhalin -1 “, the project will be partially paid for by the budget, said the head of the tax practice Sameta Andrey Panfilov. As part of the production sharing agreement the State will compensate the “Rosneft” and other investors the cost of construction of the plant (to increase the share of compensation of production), and thus reduced his income from the project. But instead the government can count on the part of the potential income from the operation of the plant after it is put into operation.

Deputy Energy Minister Cyril Molodtcov told RBC that knows about “Rosneft”. According to him, the Ministry of Energy will not be able to match it up as long as the “Rosneft” is not present investment justification.

A source close to the party meeting at Dvorkovich, said that it was dedicated to the support measures of “Rosneft”. Specific instructions departments was given. The oil company had to formulate their proposals to support, including to provide the financial justification, confirms the source of RBC.

RIA Novosti, citing a source close to the Sakhalin Oblast Administration, reported that the authorities in favor of introducing the project ” Far LNG “in the project” Sakhalin-1 “, in order to avoid possible negative effects of Western sanctions.

The representatives of” Rosneft “and Dvorkovich declined to comment yesterday.

Sanctions and Sakhalin

In the middle of August it became known that the president of “Rosneft” Igor Sechin, asked the government for help, the need to provide it just explained the US Treasury sanctions, which banned American banks to the Russian state loans more than 90 days. He suggested several ways to support the most expensive of them – on the purchase of the National Welfare Fund bonds “Rosneft” to 1.5 trillion rubles. The Government approved in principle the request of a state support, but specific applications SWF it is not sent, noted last week, Minister of Economic Development Alexei Ulyukayev. According to him, there can be different forms of state: in addition to the redemption of bonds can be, for example, about the customs and tariff regulation.

Source in “Gazprom” says gas company opposed the inclusion of “Far East LNG” part of the project “Sakhalin-1″, as it is contrary to the interests of the state. He recalls that “Gazprom” as the operator of the project “Sakhalin-2″ offered to process gas from the “Sakhalin-1″ at its LNG plant. In this case, the cost would have been half as much.

«Rosneft” in 2013 seeking access to the Trans-pipe “Sakhalin-2″, extending from north to south of the island, to supply gas to its deposits of “Sakhalin-1 “to” Far East LNG “, but so far unsuccessfully. Spring, the company complained to the FAS, and in July – the Court of Arbitration of the Sakhalin area. The decision has been made yet. The issue of access to the pipe – one of the key to the economy of the project, said earlier Sechin.

Lyudmila Podobedov Timothy Dzyadko

September 23, 2014

RBC

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