Russia set to liberalise LNG exports

The Russian government Wednesday approved draft amendments to federal laws to liberalize Russia's liquefied natural gas (LNG) exports. The draft legislation for the first time allows other Russian companies to compete with the country's natural gas giant Gazprom to export LNG. "This is a very serious and major decision for us, which to a certain degree will involve a departure from the export monopoly," Prime Minister Dmitry Medvedev told a televised government meeting. Medvedev said the changes would create more opportunities for development of the country's energy sector and stronger access to the Asian-Pacific's gas markets. Still, he noted, the draft legislation outlined certain criteria a gas-exporting company must meet in order to be allowed into the highly monopolized market. Energy Minister Alexander Novak said rights to export LNG would go to companies which accepted obligations to build LNG-processing plants and the state-run companies which developed natural resources in Russian territorial waters. Novak said the amendments had been introduced due to rising LNG consumption in the world, especially in the Asia-Pacific region. Currently, the global LNG market is 240 million tons a year. By 2020, it is estimated to rise to 360 million tons, and to 480 million tons by 2030, according to the ministry. Having now secured cabinet backing, the draft legislation will be submitted to the Russian parliament and, if passed, is expected to go to President Vladimir Putin for signing later this year. After the legislation came into force, Russia's share of the global LNG market was expected to increase from the current 4.5 percent to 10 percent in 2020, Novak said.