India’s top energy companies, Petronet LNG Ltd. and ONGC Videsh Ltd., are having discussions about buying a stake in Russia’s planned liquefied natural gas project Arctic LNG 2, as their government seeks to secure supplies of the cleaner burning fuel.
Talks about acquiring a joint 9.9% stake from Novatek PJSC are still continuing and no final decisions have been made, according to a member of the Indian energy delegation in Moscow, who is involved in the negotiations and spoke on conditions of anonymity as the matter isn’t public.
India’s Prime Minister Narendra Modi is pushing for a gas-based economy by doubling the share of the super-chilled fuel to 15% of the country’s energy mix by 2030, which would boost imports of the fuel. Russia, which vies for a global leadership in liquefied natural gas (LNG) supplies and aims to build a number of production plants in the Arctic with a focus on deliveries to Asia, would be a natural LNG ally for the South Asian nation.
There are Indian companies in contact with Novatek about Arctic LNG 2 and “everything is on the table,” Minister of Petroleum and Natural Gas Hardeep Singh Puri told reporters at a briefing in Moscow, without giving further details. Puri headed the Indian energy delegation at the Eastern Economic Forum in Vladivostok last week and met with a range of Russian oil and gas executives, including Novatek Chief Executive Officer Leonid Mikhelson.
Petronet LNG, ONGC Videsh and Novatek didn’t immediately respond to requests for comment.
Novatek, Russia’s largest producer of LNG, owns 60% in the $11-billion Arctic project. France’s TotalEnergies SE, China National Petroleum Corp. and Cnooc Ltd. have 10% each, with the remaining 10% held by a Japanese consortium. The partners expect to start the first train in 2023, with the Arctic LNG 2 plant reaching its full nameplate capacity of 19.8 million tons in 2025.
Initially, Novatek expected European, Russian and Asian lenders to each provide a third of the financing but has faced issues getting loans for the plant from European lenders, Mikhelson said. The share of Russian financing may rise to about 60%, he said.
“We have partners,” Mikhelson told reporters last week in Vladivostok, “yet we don’t see any support from their governments.”
Indian state-run companies have invested about $16 billion in Russian oil and gas projects such as Sakhalin-1, Vankor and Taas-Yuryakh, according to the South Asian nation’s oil ministry. A decade ago, ONGC Videsh, Petronet LNG and GAIL India Ltd., considered buying 20% in Novatek’s first LNG project but the deal didn’t happen.