Almost 1,500 miles from Moscow, the tiny port of Sabetta nestles in a desolate Russian Arctic peninsula. A former outpost for Soviet geologists, it's now the site of Russia's most ambitious liquefied natural gas project, operated by a company that only entered the market just over a year ago.
Several times a week, a giant tanker leaves this remote place carrying the super-chilled fuel to buyers in Europe and Asia. It's not the only LNG plant beyond the Arctic Circle, but it's by far the largest.
Novatek PJSC, the main shareholder of the Yamal LNG plant, said plans for further projects will transform Russia into one of the biggest exporters of the fuel within a decade. Already the world's top exporter of pipeline gas and second-biggest shipper of crude oil, exports from Sabetta are giving President Vladimir Putin's Russia another conduit into the world economy for the country's unrivaled energy resources.
"Russia can be in the top four main LNG exporters," said Novatek's Chief Financial Officer Mark Gyetvay.
Novatek has demonstrated that it's possible to produce and liquefy the fuel in such harsh conditions at competitive prices and ship it to markets thousands of miles away in Europe and Asia. That's helped by receding Arctic ice which is allowing a specially built fleet of strengthened tankers to ship fuel along Russia's northern coast.
This week, Putin will tout the potential for development of Russia's hydrocarbons at the International Arctic Forum in St. Petersburg. Russia's leader has been a long-standing supporter of developing oil and gas resources locked under the region's permafrost. When opening the first production train of the Yamal LNG project in late 2017, Putin said, "We can boldly say that in this century and the next, Russia will expand thanks to the Arctic."
Novatek, whose biggest shareholders include Russian billionaires Leonid Mikhelson and Gennady Timchenko, as well as French energy giant Total SA, became Russia's top LNG producer after starting up its plant in the Yamal peninsula almost two years ago. The facility reached its full capacity at the end of 2018, ahead of schedule, doubling Russia's share of the global LNG market to 8%.
The gas producer has aggressive plans to command 10% of the global market by 2030, Gyetvay said, and position Russia as one of the world's largest exporters alongside the U.S., Qatar and Australia.
All three of Yamal LNG's production units, with a combined actual capacity of 17.5 million tons a year, are now online.
The company is also considering commissioning a third facility and may increase its LNG production target for 2030 by about 20%, to as much as 70 million tons a year.
Russia, the world's largest gas exporter, has been slow to join the global LNG boom as it has focused investment on pipeline supplies to Europe. The country has now taken an interest in the market for tanker-borne fuel amid growing global LNG demand and more difficult relations with its customers in the European Union.