The state will not get the return it hopes for from the LNG projects in the Arctic.

20 february 2016 | PortNews

Alexander Kurdin, the Head of the Department for Strategic Studies in Energy of the Analytical Center, estimates that for Russian companies to break even selling liquefied natural gas (LNG) to Europe, the price of LNG must be USD 250-300 per thousand cubic metres, which could only happen if oil was trading at about USD 60 a barrel (oil prices correlate with natural gas prices).

Alexander Kurdin
Alexander Kurdin
Department for Fuel and Energy Sector

 “The Arctic projects to extract and liquefy natural gas to make LNG will not break even if the oil price is less than USD 60 a barrel,” Mr Kurdin was quoted as saying by the PortNews news and analytics agency. The expert voiced this opinion during the international conference Arctic and Shelf Projects: Prospects, Innovations and Regional Development (Arctic 2016).

Alexander Kurdin also noted that natural gas prices are lower in Asia today than they were in Europe when the decision was made to invest in Arctic LNG projects. For this reason, the expert does not believe the state will get the return it hopes for from the Arctic LNG projects even though it has already backed them both through direct investments and via numerous exemptions and benefits.