Tuesday, January 11, 2011

European Spotlight: Russia invites Japanese firms to participate in the LNG project

Monday, January 10, 2011, 10:12 [IST]

Russian Prime Minister Vladimir Putin has invited Japanese firms-Mitsui and Mitsubishi to participate in the liquefied gas field project on the Russia's Yamal Peninsula on the Arctic Ocean. Russia plans to complete feasibility studies in the first half of 2011 and start LNG production around 2020. The project which is estimated between 10 trillion yen to 20 trillion yen would be the nation's biggest LNG endeavor and will be led by Russia's state-run Gazprom, the world's largest gas supplier. The investment by Mitsubishi and Mitsui would be capped at 10 percent of the project's costs.

The Yamal Peninsula project would be the largest LNG project Japanese firms have participated in to date. The peninsula is believed to have gas reserves of more than 38 trillion cubic meters. The Russian government had announced a preferential tax package for overseas participants in the country's natural gas development projects in October 2010 to attract foreign investments.