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Russia to liberalise LNG exports

LNG Industry,

The Russian parliament is soon to receive a bill outlining the country’s plans to open up its liquefied natural gas (LNG) export market from 1st January, Energy Minister Alexander Novak said today. Novak stated that Russian giant Gazprom is expected to strike a deal with China National Petroleum Corp (CNPC) by December 2013.

Earlier in October, Russian president, Vladimir Putin revealed Russian plans to remove restrictions on LNG exports in a bid to meet growing demand from the Asia-Pacific marketswhere demand for gas is driven by China, who are expected to use up to 230 billion m3 of gas by 2015.

Speaking to reporters at the World Energy Conference in Daegu, South Korea, minister Novak said: "The work as of today has been finalised […] It has been coordinated and agreed by all the ministries of the cabinets, and in the near future it is going to be submitted to the State Duma, the parliament of the Russian Federation. We expect the law to take effect [as of] the first of January next year.”

Liberalising LNG exports, however, would detract from state-run Gazprom’s control on Russian gas exports. As a consequence to such a threat, the company has reinitiated talks that have spanned 10 years with China over potentially supplying the country with pipeline gas.

In September, an agreement was arrived at, although the two parties are yet to decide on a price. Speaking of this deal, Novak said: "We really expect Gazprom and CNPC to reach agreement by the end of this year."

Russian gas producer Novatek and oil producer Rosneft have both petitioned for LNG export rights. Rosneft has agreed a deal with ExxonMobil which will see the construction of an LNG plant in the far east of Russia. The cost for this is thought to be around US$ 15 billion.

Edited from various sources by Ted Monroe

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