A project Total in the Russian Arctic do not care about sanctions

The Russians called it “Christophe de Margerie”: Cyrillic and Latin name of the former President of Total, who died in October 2014 in a plane crash in Moscow, now resides on Board the tanker-icebreaker in the Belgian port of Zeebrugge. The last tribute to the memory unchanged “friend” of Russia, who defended her even after the introduction of Western sanctions in response to the annexation of Crimea.

The French company has huge interests in Russia, primarily in the gas sector. And the arrival in Europe of a vessel of the company “Sovkomflot” with the South Korean shipyards Daewoo on 20 January was a sign that started with Christophe de Margerie key project Total does not stand still: we are talking about the extraction and liquefaction of gas (16.5 million tons per year) in one of the most inhospitable regions of the planet. Building of unprecedented size and complexity would cost $ 27 billion (due to sanctions the financing is in Euro) “NOVATEK” (50,1%), Total (20%), China National Petroleum Company (20 %) and Fund Silk Road Fund (9,9 %).

“Christophe de Margerie” will be tested before the first test on the frozen sea and sending it to the LNG terminal on the Yamal Peninsula. Company “Yamal LNG”, which is engaged in the exploitation of these vast reserves, intends to begin deliveries in late 2017. When the rate of production will be released at the expected level in 2021, you will need 15 tankers icebreakers of this type (299 meters long and 50 meters wide) for maintenance supplies. These monsters are worth 300 million dollars can go on the frozen 1.5 meter sea at a temperature of -50 °C and transported 170 thousand cubic meters of LNG (-160 °C).

The shift to Asia

To ensure the profitability of such a project, especially in the period when the prices of LNG are quite low and can remain so for several more years due to overproduction (Australia, Qatar, USA…) supplies necessary to maintain a 365 days a year, although the sea route is icebound for six to nine months. “Due to the low cost of production of “Yamal LNG” is a competitive project. And that’s why he can withstand price volatility,” said summer President of Total, Patrick Pouyanne (Patrick Pouyanné) in interview to the newspaper “Kommersant”.

Almost all of the gas Yamal LNG sold in advance under long-term contracts (for 25 years) for large clients in Asia and Europe. The prospects for the American market took off a few years ago with the intensification of the extraction of shale gas in the United States. In addition, in 2012 the energy revolution has delayed indefinitely a project to develop the giant Shtokman field, in which Total was a partner Gazprom.

Russian President Vladimir Putin pays great attention to these projects, including the fact that they allow you to move the trade balance towards Asia and especially China. Chinese leader XI Jinping is considering them as part of the “new silk road”. No coincidence that focused on the development of trade corridor between China and Europe, the Foundation has allocated funds to “Yamal LNG”.

At the same time, partners and promoters of the project “Yamal LNG” prefer not to dwell on his other, less attractive side: it contributes to climate warming. The thinning of the ice cover allows ships through the Northern sea route and faster access to the markets of China, Japan and Korea. In the summer on the delivery of the goods from “Christophe de Margerie” and other ships will take only two weeks. In winter, this period is doubled: they have to get to Zeebrugge to reset the gas on conventional tankers, which then go through the Suez canal.

The polar code enters into force

Environmentalists is not the first to point out the absurdity of the situation: consumption has a serious impact on global warming, which in turn facilitates transportation from the Northern regions and… supports the consumption! Patrick Pouyanne argues that gas is a significant step forward in the production of electricity, leading to significantly lower CO2 emissions than coal.

At least environmentalists can rejoice the entry into force on 1 January 2017, the Polar code the International Maritime organization. This document contains all the standards for responsible Maritime transport (the safety of seafarers, environmental protection…) in the Arctic and Antarctic, with extremely fragile ecosystems. Whatever it was, it does not cover all risks, the unhappy environmentalists.

Moreover, the political situation also gives them confidence. They didn’t have an ounce of trust to Vladimir Putin, and now appeared a new source of concern: the environmental policy of the new U.S. President Donald trump, who says it will erase everything we’ve achieved under Barack Obama.