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Russian State Duma to pass law in fall allowing non-field-specific LNG exports — lawmaker

In July, a group of Duma deputies submitted draft amendments to the law on gas exports that, if enacted, would permit supplying LNG to foreign buyers without the need to peg the gas to specific fields

YUZHNO-SAHALINSK, September 27. /TASS/. Russia’s State Duma (lower house of parliament) plans this fall to amend the law on gas exports to permit foreign deliveries of liquified natural gas (LNG) without the resources being pegged to specific fields, Duma Energy Committee Chairman Pavel Zavalny said at an industry forum.

"The draft legislation is being readied for the first reading, and it will be considered by the committee on October 11. I hope that it will be passed in October-November after factoring in the government’s comments on the bill (which was initiated by the Duma - TASS)," he clarified.

In July, a group of Duma deputies submitted draft amendments to the law on gas exports that, if enacted, would permit supplying LNG to foreign buyers without the need to peg the gas to specific fields. Leonid Mikhelson, CEO of Novatek, Russia’s second-largest gas company, had earlier suggested making such legislative amendments, which are necessary, in particular, for the Murmansk LNG project.

Under the draft federal legislation, it would be possible to export LNG from projects without making specific reference to federally significant subsoil areas with licenses permitting the use of natural gas extracted for LNG production, as well as potential export of LNG to legal entities within a single corporate group with entities that are already licensed to export LNG.

The rationale for the bill is to enable companies implementing LNG projects with a capacity of over 20 tons per hour to be listed among entities that are allowed to export LNG, if more than 50% of their equity is owned by persons or entities entitled to directly or indirectly manage more than half of an ownership stake in companies that are entitled to export LNG (which holds a license allowing for the construction of an LNG plant or for directing subsoil resources for gas liquefaction from a number of federal blocks).

Mikhelson said in early June that Novatek had proposed amending the law governing the export of gas from Russia to make projects eligible to be awarded the right to supply LNG without reference to specific fields. For example, such a right could be awarded to the company’s planned Murmansk LNG project as it presupposes that one legal entity would be engaged in gas production, while a second would handle transportation, and a third entity would be engaged in gas liquefaction and export.