Gazprom Positions New Vladivostok LNG Plant to Supply Booming Asia Market

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The Asia-Pacific region is set to experience steeply rising demand for LNG over the short, medium and long term. The combined Southeast Asian LNG demand will account for 33% of overall Asian demand growth by 2025, growing at 45 million tons annually.

Sustained, strong LNG demand in Southeast Asia will more than compensate for India's slowing demand growth. The demand expectations in Asia have strengthened in recent years due to the reduced long-term reliance on nuclear power in Japan and Taiwan, as well an increased role for LNG in China's coastal provinces, according to Wood Mackenzie.

The International Energy Agency (IEA) reports that for 2010, Chinese natural gas demand was 3.7 trillion cubic feet and increased to almost 4.6 trillion cubic feet in 2011. That year, China imported 384 billion cubic feet of natural gas in the form of LNG.

It is with these market prospects in mind that giant Russian gas utility Gazprom's (OTC:OGZPY) (Moscow) board has approved the construction of an LNG plant near the eastern port city of Vladivostok. Following a management meeting to discuss the project, Gazprom said that it was interested in working with Chinese partners on the facility at Vladivostok.

The project covers the building of an LNG plant and terminal on the Lomonosov Peninsula in Perevoznaya Bay. Three process trains will each have an annual production capacity of 5 million tons of LNG, with the first train coming on stream in 2018. Gas from the Sakhalin center and the Yakutia and Irkutsk centers will serve as the resource supply base, with the LNG product exported to the Asia Pacific markets.

The IEA forecast that Asia will consume 790 billion cubic meters of gas by 2015 making it the world's second largest market.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.