A Government’s Decision to Pave Way for Production of Clean Fuels

On 9 September, the Russian Government authorized Novatek, a gas giant operating in the High North, to use the natural gas extracted from two of its deposits in Yamal to produce clean fuels such as “blue” ammonia, hydrogen and methanol. This decision opens the way for launching Obsky Gas Chemistry, a plant expected to be able to produce about 2.2 billion ton of ammonia per year by 2026.

In parallel, Novatek is taking steps to secure control over other hydrocarbon deposits in its area of operation. On 8 September, the company won a bid for the Neytinskoe and Arkticheskoe natural gas and oil fields located in the Yamal Autonomous District for 13 billion rubles (USD 180 million). According to estimates, together the two deposits contain about 413 billion cubic meters of natural gas and 28 million tons of liquid hydrocarbons. “The new license areas are located in close proximity to Novatek’s existing assets on the Yamal Peninsula and expand the Company’s resource base for implementing LNG projects”, Novatek says.

Increasing the output of the existing LNG projects and putting in operation new production clusters in the Arctic will help not only foster growth and create new jobs, but also improve Russia’s competitiveness in light of the trend towards a clean energy based economy. The production of blue fuels can contribute to diversifying the country’s energy exports and secure a niche in the developing world energy market.

Arctic Today is a column by PORA CEO Alexander Stotskiy analyzing major international, national and regional events and trends in the Arctic.