Chinese investors could finance Murmansk LNG

According to Leonid Mikhelson, the companies CNPC and Silk Road Fund should be exempted dividend tax in project Yamal LNG. In return, the Chinese will re-invest the money in new LNG projects in the Arctic.

According to newspaper Kommersant, Leonid Mikhelson has already sent a request to the federal government about the issue.

The Chinese companies CNPC and Silk Road Fund own 20 percent and 9,9 percent respectively of the Yamal LNG. In the Arctic LNG 2 project, the CNPC and CNOOC both own 10 percent stakes.

They all pay a 10 percent tax on dividends.

Reportedly, the Chinese companies have long called for a reduction of the tax, and Mikhelson now calls on government to follow up.

ADVERTISEMENT

The Novatek leader argues that the tax be fully exempted, alternatively reduced to five percent. French partner Total, which own 20 percent of the Yamal project, only pay 5 percent dividend tax.

In return, the Chinese companies will re-invest the money in new LNG projects, Mikhelson explains.

The request comes at the same time as Novatek announces plans for a new LNG project in the Kola Peninsula. The Murmansk LNG is to have a capacity of 20,4 million tons per year, and launch the first of three projected development trains already in 2027. The project will apply floating gravity-based structures built at Novatek’s Kola Yard in Belokamenka.

The project also includes a pipeline connection from Murmansk to Volkhov, the gas distribution hub located near St.Petersburg, and it will take advantage of cheap electric power from the Kola Nuclear Power Station, Kommersant reported.