Moscow Offers LNG to Riyadh

Russian President Vladimir Putin said on Friday Russia was ready to sell gas to Saudi Arabia after he flagged off the first loading of liquefied natural gas at the Novatek-led Yamal LNG project in the Arctic.

Russia is the world’s biggest gas producer, but most of its exports are via pipeline rather than LNG, a super-cooled fuel that can be transported by ship. It is the world’s seventh biggest LNG exporter, Reuters reported.

“Buy our gas and you’ll save oil,” Putin told Saudi Energy Minister Khalid al-Falih, who also attended the launch ceremony in Arctic tundra, according to a report by Interfax news agency.

“If we continue to work the way we do, we will turn from rivals into partners. All benefit from joint work,” he said.

Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, and Russia worked together on a deal between OPEC and other producers on cutting oil output until the end of 2018 to curb a global crude supply glut.

Putin and Saudi Arabia’s King Salman, who visited Moscow in October, had agreed on joint investment deals worth several billion dollars, a boost to the Russian economy that has been battered by low oil prices and western sanctions.

Leonid Mikhelson, ranked Russia’s richest businessman and the head of Novatek that has a 50.1% stake in Yamal LNG, said on Friday he discussed gas projects with Saudi officials but did not give details.

Yamal LNG, which is 20% owned by France’s Total, aims to help Russia double its share of the global LNG market from about 4% now by 2020. Qatar is the biggest LNG exporter, with a 30% market share.

The first phase of the $27 billion project was completed in December. Other phases are due to come on stream in 2018 and 2019.

The project will eventually have four processing units, known as trains, with a total capacity of 17.5 million tons a year. Three trains will have a capacity of 5.5 million tons each and one will have a capacity of 1 million tons.

“I am confident the second and the third parts of the project will be commissioned ahead of schedule,” Putin said at the ceremony to load the first shipment on to an ice class tanker.

Until Yamal LNG was built, Russia had one LNG plant, known as Sakhalin-2, controlled by Gazprom.