Gazprom mulls delaying LNG projects to focus on gas pipelines to China

By ELENA MAZNEVA
Bloomberg

OAO Gazprom could delay some investments next year to focus resources on building pipelines to China and paying dividends, a person with knowledge of the matter said.

Investments in the planned Vladivostok LNG in Russia’s Far East and possibly other projects may be postponed, the person said, asking not to be identified as the information isn’t public.

US and European sanctions on technology exports to Russia could hold up construction in any case, he said.

Gazprom planned to start the plant, a day’s voyage from the world’s biggest LNG importer, Japan, by 2019. Seeking to increase its presence in Asia, Gazprom agreed with a group of Japanese companies led by trader Itochu Corp. to study the feasibility of the project in 2011.

Last year, Gazprom said gas pipeline supplies to China could me more competitive than Vladivostok LNG, a project that may cost about $15 billion, according to estimates of VTB Capital analysts in Moscow.

Gazprom preliminary plans its investment program for 2016 at about 800 billion rubles, close to an initial plan for this year, chief financial officer Andrey Kruglov told reporters in Saint Petersburg, Russia, on Thursday.

The company aims to keep its dividends at at least this year’s level, he said.

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