ExxonMobil Halts Construction Of LNG Production Plant In Russia - Khabarovsk Governor

The US energy company ExxonMobil has halted the construction of Russia's Far East plant for the production of liquefied natural gas (LNG) during the country's special military operation in Ukraine, Khabarovsk Governor Mikhail Degtyarev said on Monday

KHABAROVSK (UrduPoint News / Sputnik - 04th April, 2022) The US energy company ExxonMobil has halted the construction of Russia's Far East plant for the production of liquefied natural gas (LNG) during the country's special military operation in Ukraine, Khabarovsk Governor Mikhail Degtyarev said on Monday.

"The project that Americans announced - Exxon - in the port of De-Kastri with a pipe from Sakhalin, it has been halted, until their separate decisions. Why this is has been done, it strikes me that this is like shooting yourself in the foot. There is gas, there is a coast, there is a labor force, there are investments, money, but they go and stop the project for political reasons," Degtyarev told the Komsomolskaya Pravda radio station.

The governor noted that before the beginning of Russia's special operation in Ukraine, ExxonMobil representatives had expressed their readiness to go ahead with the project and had begun preparatory work.

In early March, the US company decided to suspend new investments in Russia and to withdraw from the Sakhalin-1 project over the Ukrainian crisis. In the project, a 30% share belongs to ExxonMobil, 20% to Russia's Rosneft, 30% to Japan's Sodeco, and 20% to India's ONGC.

On Monday, ExxonMobil said that it expected a possible depreciation of book value of assets worth $4 billion due to its withdrawal from the Sakhalin-1 project.

In 2019, shareholders of the Sakhalin-1 project decided to build a plant with a capacity of 6.2 million tonnes per year in the settlement of De-Kastri in Khabarovsk in Russia's Far East. The Russian Energy Ministry estimated the plant's cost at $4.2 billion. According to a long-term program for the development of LNG production in Russia, the project's capacity could have reached 10 million tonnes, given the resources of the Veninsky block of Rosneft's deposits, with gas reserves of 578 billion cubic meters.