Why an LNG producer is considering expanding its Arctic product line.
NOVATEK is thoroughly determined to build a gas chemical plant on the Yamal Peninsula, which has not been discussed for a long time. Recently, the company signed a memorandum with the Japanese Ministry of Economy on cooperation in the production of ammonia, hydrogen, as well as capture and utilization of carbon dioxide, and concluded an agreement with the Bank of Japan on cooperation in the implementation of projects with a low carbon footprint.
The future chemical plant seems to be non-core for the company focused on the production, liquefaction, and transportation of gas. The demand for LNG is huge, a number of countries are aiming at increasing its production by 1.5-2.5 times, and the Russian Federation, of course, does not want to be an outsider. Russian liquefied gas is produced primarily at the Yamal LNG complex. Last year, it produced about 19 million tons of products with a design capacity of 16.5 million.
There are attractive preferences for chemical enterprises in the Arctic zone.
It has been announced that a gas chemical complex (GCC) will appear next to the seaport of Sabetta. It will cost more than $ 2 billion. At the industrial site, they want to produce ammonia from the gas produced nearby, and also, probably, methanol. So what accounts for this choice? First of all, the decarbonization of the global energy sector has begun. Moreover, as explained in the Ministry of Natural Resources of the Russian Federation, there are attractive preferences for chemical enterprises in the Arctic zone.
According to forecasts, the demand for a nitrogen-hydrogen compound will increase by no less than for LNG. It is expected to be widely used as a harmless (no CO2 emissions) fuel for cargo and passenger ships. The corresponding projects were launched in Malaysia and Norway. Ammonia is easy to store and transport, it can be used both for transportation and for the production of the main fuel in the future - hydrogen. In a word, it is a universal substance in the era of rejection of hydrocarbons. And this way, it seems logical to release it next to one of the nodal ports of the Northern Sea Route.
The feedstock, natural gas, is underfoot. However, today it is considered undesirable for the production of ammonia, since it is accompanied by CO2 emissions. In Europe, the United States is betting on "green" ammonia produced using renewable energy sources, but they are practically excluded in Yamal. To maintain the carbon balance, our gas chemists, in international partnership with scientists and engineers, have to face a very difficult challenge - to find an economically optimal and environmentally sound sequestration technology. In this case, it consists in capturing and utilizing (most likely by burying in depleted formations) carbon dioxide released during production processes, for example, during steam reforming. But, according to top managers of the Russian fuel and energy complex, it is a high-cost operation. Besides, there is no guarantee that someday aggressive and capricious CO2 will not escape from the depths. Moreover, in high latitudes permanently frozen soil is thawing.
The second presumed GCC product is methanol. Researchers see it as a worthy alternative to carbon fuel. In any case, when mixed with gasoline, engine exhaust pollutes the air much less. Well, the situation on the world market encourages the production of methanol, the price of which, according to analysts' forecasts, will continue to rise.