Tax break for Russian LNG company

RUSSIA / FSU POLITICS - In Brief 01 Sep 2019 by Alex Teddy
On August 30 it was announced that Novatek (Russia's second biggest LNG extractor) has been granted a USD 597 million tax break. This is to incentivize building a part in the Arctic nar Gydan. Putin supports this effort. He sees the Arctic as the key region for economic growth. This port will also prove useful for the Northern Sea Route. As the Arctic melts more of the ocean there will become navigable.The new port will be 70% paid for by the federal budget. The total cost is USD 193 million. The new port is named Utrenneye and is scheduled for completion in 2033. Utrenneye only received approval in July 2019. First of all a ship channel must be dug through Ob Bay and the state will own the channel. Novatek has a new LNG project called Arctic LNG 2 and the port will be very useful for this. This project will produce 19.8 million tons of LNG per annum.Novatek received a major tax break for its Belokamenka LNG project earlier in 2019. This has led to grumbling about favouritism. Novatek has 15 tanker vessels. Most of these are ice class. Until July 2019 its ship to ship reloading was done in Norway. New facilities have been built allowing this to take place in Russia.

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