LNG from Arctic reaches Jiangsu

The first direct shipment of LNG from Russia's Arctic region to Asia was delivered to PetroChina's Rudong terminal in Jiangsu province on Thursday, the first time the gas has arrived in Asia directly via the Northern Sea Route since the Yamal LNG plant came online in December.

China National Petroleum Corp, the nation's largest oil and gas producer by annual output, had pledged to buy at least 3 million metric tons of LNG annually from the Yamal LNG project by 2019 to meet increasing fuel demand, said CNPC, which is an investor in the project.

The second LNG tanker bound for Asia, Eduard Toll, which departed on June 27, is expected to arrive at CNPC's Rudong LNG terminal on Friday.

China and Russia are currently experiencing their best relationship in history and the Yamal project is a good example of the strategic relation between the two nations, said Nur Bekri, vice-chairman of the National Development and Reform Commission and director of the National Energy Administration, during the ceremony held in Rudong on Thursday.

China and Russia see huge potential in energy cooperation, and the project will play a significant role in reducing pollution through upgrading the country's energy mix as natural gas has huge consumption potential in China, he said.

Around 40 shipments of LNG have been transported from the Yamal LNG project since it came online last year, mostly westbound.

Acting through its subsidiary CNPC Russia, CNPC bought a 20 percent stake for $5.4 billion in Novatek's $27 billion Yamal project in September 2013.

Novatek is Russia's independent natural gas producer and the nation's second-largest LNG company after state-owned Gazprom.

Much of the output of Yamal, a joint venture among Novatek (50.1 percent), Total (20 percent), CNPC (20 percent) and Silk Road Fund (9.9 percent), would be supplied to China and other Asian countries, according to Novatek.

In September 2013, CNPC, the nation's largest oil and gas producer by annual output, acting through its subsidiary CNPC Russia, bought a 20 percent stake for $5.4 billion in Oao Novatek's $27 billion Yamal project.

Li Li, energy research director at ICIS China, a consulting company that provides analysis of China's energy market, said the project plays a significant role in boosting China's gas supply and ensuring national energy security.

China's surging demand for natural gas and its policy to replace more fossil fuel with cleaner natural gas to reduce pollution are very lucrative for global energy giants, she said.

China has had steady and long-term cooperation with Russia for a long time, including Russia's Gazprom's 30-year contract with China to supply 38 billion cubic meters of natural gas annually from 2018.

China's participation in Yamal is in accordance with Chinese companies' going global strategy, she said.

Evgeniy Kot, director-general of the Yamal project, told China Daily earlier that the company has sold 96 percent of the project's LNG production to European and Asian customers through 20-25-year contracts.