Gazprom fuels its LNG bunkering strategy

• 02 Jan 2019

In addition to the commitment  for trucks filling stations (read HERE) Gazprom is continuing its expansion into small-scale LNG supply to ships (via coastal depots and ship to ship supplies). The commitment follows the first supply experiences already made with tankers in the North Sea (read HERE).

On December 25, the Board of Directors of Gazprom examined the prospects of the liquefied natural gas bunkering market, forecasting an increase in LNG consumption as a fuel that meets the environmental requirements  (sulfur content 0,5 percent  on 1 January 2020) and a "significant" reduction in the use of fuel oil.

Gazprom confirms its commitment to the logistics initiatives for the Baltic Sea and the North Sea and the possibilities of building plants in the Black Sea area and in the Russian Far East. The Board of Directors has expressly instructed the Management Committee to continue with investments as decided in the meeting, to produce and sell maritime LNG .

Gazprom operates in the sector through its subsidiary Gazprom Neft, a vertically integrated oil operator engaged in the production and sale of oil and gas products, which in turn controls Gazpromneft Marine Bunker, a leading operator in the Russian bunkering market, with a share of 16.6 % and a fleet of 11 ships. The company operate with bunkering services in all the main ports of the Country and in Constanta (Romania), Riga (Latvia) and Tallinn (Estonia).

On 26 December, the day following the Gazprom Board meeting, Keppel Offshore & Marine, through its subsidiary Keppel Singmarine, signed a contract for the design and construction of an LNG bunker vessel of ​​5,800 cubic meters for the Gazpromneft Marine Bunker for operations in the Baltic Sea.

Keppel's contract was signed with shipping company Shturman Koshelev LLC and provides for the delivery of the ship, which will be classified in the Russian Maritime Registry of Navigation with the annotation Arc Class Ice 4 (equivalent to the Baltica IA class), in the fourth quarter of 2020.

At the same time continues the construction of a coastal LNG warehouse and docking facilities for ships near  the natural gas compression station of the Nord Stream gas pipeline Portovaya in Vyborg, Leningrad Oblast, overlooking the Gulf of Finland. LNG deposit will enter in service by 2019.

In 2018 Gazprom signed collaboration agreements that also include the development of small-scale LNG with the Japanese company Itochu Corporation and Shell in particular for the Baltic LNG project (http://www.gazprom.com/projects/baltic- lng /). This is a natural gas liquefaction plant with a capacity of 10 million tons / year to be built in Ust-Luga, still in the Gulf of Finland near the border between Russia and Latvia. Other agreements have been signed with the Chinese Government (State Council of the People's Republic of China) and with the Vietnamese oil and gas company PetroVietnam.