Gazprom to Develop Baltic LNG with $1.6bn Support from VEB

Baltic LNG, Gazprom’s new chemical and liquefied natural gas (LNG) project in the port of Ust-Luga, will be supported by Russian state-owned development bank VEB with up to 111 billion rubles ($1.6 billion), the lender announced last week, according to

The announcement follows comments made by Russian prime minister Dmitry Medvedev that the project could not be built without state support.

Other state banks and the Russian sovereign fund are also expected to help with the financing of the estimated 900 billion ruble ($13.5 billion) project.

“It’s big and expensive,” Medvedev said of the project during a board meeting with VEB. “(The project) certainly requires careful attention from the state, taking into account that this project cannot kick off without it.”

Gazprom and RusGazDobycha – a special-purpose company created by National Chemical Group – plans to build the large-scale complex to process ethane and produce LNG near the settlement of Ust-Luga, in the Leningrad Region.

The plant will process 45 billion cubic meters (Bcm) of gas and produce 13 million tonnes per annum (Mtpa) of LNG, up to 4 Mtpa of ethane and over 2.2 Mtpa of liquefied petroleum gases (LPG).

The project will run on ethane produced by Gazprom from the Achimov and Valanginian deposits. Its first train is expected to come online in the second half of 2023 and the second train in late 2024.

Anglo-Dutch energy giant Shell left the project earlier this year because it didn’t agree with Gazprom’s decision to change the concept to integrate chemical facilities. The oil supermajor said the initial concept, to separate the LNG project from the chemical plant, would be “technical and economically investable.”