The gas is produced in one of the most inhospitable places on the planet, in a place where everything from streets to telecommunication to toilet paper is missing. Its transported by special ice-breaking tankers to permanently ice-free ports where its dumped into land-based terminals where it is stored in order to be reloaded into regular tankers in order to continue their journey to the consuming nation. None of those things is cheap. Producing gas in Yamal was once considered a true upstream challenge, today nobody wants to talk about it, ice breaking tankers command a premium and reloading is not for free. And this LNG competes in a world market where delivered price regularly drops to USD 5/mmbtu. There must be someone with serious magic powers in Russia as otherwise, I do not understand how they make money.
France’s Total plans to invest in 10 percent of two transport hubs in Murmansk and Kamchatka that Russian gas producer Novatak wants to build to ship liquefied natural gas, the head of Total said on Thursday.