Gazprom's (RTS: GAZP) management board has reviewed the results of a feasibility study of the options for gas use near Vladivostok, as well as for sales of gas and gas chemicals from the region to potential buyers in Asia Pacific region countries.
As a result, the company's specialized subdivisions have been ordered to prepare a justification of investment for constructing a liquefied natural gas (LNG) plant near Vladivostok in the first quarter of 2013, the Russian gas major said in a press release.
The management board also took note of information on the prospects for implementing Gazprom's projects in South East Asia, and it instructed the relevant subdivisions to prepare materials on this issue for consideration by the board of directors in Q2 2012.
In January of last year, Gazprom and the Agency for Natural Resources and Energy under the Japanese Economy, Trade and Industry Ministry signed a cooperation agreement to prepare a joint feasibility study on the options for gas use near Vladivostok, as well as for the transportation and sale of gas and products derived from gas processing from the region to potential buyers in Asia Pacific countries.
The research confirmed the technical feasibility of a project for constructing an LNG plant in Vladivostok, as well as the presence of a niche market to produce at least 10 million tonnes of LNG per year. According to the study, the period 2017-2020 would be the most beneficial period for Gazprom to transition from the Vladivostok market to the Asia Pacific market with its own LNG.
In addition, a preliminary analysis was performed on the possibility of building a complex for compressed natural gas production and delivery, and the problems and risks associated with its implementation were also determined. The research contained a section dedicated to a preliminary study of the possibility of producing gas chemical products near Vladivostok, which confirmed the presence of the economic potential to sell such products derived from Far Eastern gas to Asia Pacific countries.
South East Asia includes member countries of the Association of Southeast Asian Nations (ASEAN): Brunei, Vietnam, Indonesia, Cambodia, Laos, Malaysia, Myanmar, Thailand, the Philippines and Singapore. East Timor, which has the status of a special observer in ASEAN, is also included.
In 2010, gas consumption totaled 143.7 billion cubic meters (bcm) in the region. Given the high level of demand for gas, South East Asia remains a net exporter of gas due to LNG supplies. South East Asia accounted for 24% of cumulative global LNG exports, or 70.7 bcm in absolute terms, in 2010.
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(Originally published March 22, 2012, in Russia & CIS Business and Financial Newswire.)