Meeting on development of LNG production projects
During the visit to the Yamal LNG plant, the President held a meeting on the development of liquefied natural gas production projects.
December 8, 2017
17:20
Sabetta
Meeting on development of LNG production projects.
President of Russia Vladimir Putin: Good afternoon, colleagues.
Today, we will discuss plans to develop liquefied natural gas production in our country. As you know, there is a reason that we gathered here, on Yamal. NOVATEK has built the largest LNG plant in Russia on the Yamal Peninsula. As you saw, we have just attended the shipment of the first batch of liquefied natural gas. This grand project required huge investment, $27 billion; it is also multi-profile, as other sectors of the Russian economy are involved in its implementation.
In this sense, we can certainly describe it as a megaproject. It is of great importance for the country as a whole, and is yet another confirmation of Russia’s status as one of the world's leading energy powers.
Yamal LNG opens new horizons for the gas industry’s development, for the entire national economy; it creates high-tech jobs, including in Russia’s North and Far East, where the transhipment terminal will be located. Mr Mikhelson [Chairman of the Management Board of NOVATEK] also talked about this today. This in itself is a separate interesting project, providing work to related enterprises; it lays the groundwork for the effective and balanced development of the Arctic and the Northern Sea Route.
It is also important that this project contributes to strengthening economic cooperation with the countries of the Asia-Pacific region, primarily, our key partners in this region, including Chinese companies. We have established successful international cooperation with France, Italy, Germany, and a number of other European states.
Of course, the number of such promising projects needs to be increased. According to experts, global demand for gas will increase by over 40 percent by 2040. It is particularly important that supplies of liquefied gas will be growing faster than any other. Here, growth can reach about 70 percent. Russia can and should occupy a decent niche on this market. Today, as you may be aware, it remains fairly modest.
In addition to Yamal LNG, we have a large gas liquefaction centre on Sakhalin, but, to reiterate, this is clearly not enough. Our fuel and energy complex is faced with the key task of increasing capacities and volumes of LNG production.
In this regard, I would like to emphasise a few points.
First, the production and export of LNG should not lead to weakening of existing positions on the pipeline gas market. Moreover, they need to be retained and, of course, strengthened. The work should be constructed in such a way that the LNG projects do not compete with our pipeline gas. On the contrary, it is necessary to create conditions for balanced, complementary areas of business in order to maximise the return.
Second, the demand for liquefied gas needs to be actively promoted within our country as well.
Its use can be expanded, including through supplying it to remotely located customers without pipeline gas and moving public transport to cleaner and more environmentally friendly natural gas engines. In this sphere, we already have good special programmes.
I hope we will have the chance to talk more about measures to support the consumption of liquefied gas on the domestic market during our today’s meeting.
Third, I would like to emphasise that such projects as Yamal LNG create the foundation for the sustainable development of territories. Here in Sabetta alone it created 32,000 jobs. As Mr Mikhelson said, now the workforce is smaller but there are still tens of thousands of jobs. There is a new port, aviation and railway infrastructure, housing and social facilities. In other words, this is not the predatory, mindless mining of resources but comprehensive development of the territory, accompanied by the implementation of many programmes, including environmental ones. This is exactly the approach that should be used in future LNG projects.
It is also important that Yamal LNG is accompanied by navigation along the Northern Sea Route, the formation of logistics routes, and a build-up of the tanker and icebreaker fleet. I am sure that this will give us unique advantages in the economy, trade and power engineering.
Fourth, obviously to increase LNG supplies it is necessary to develop gas liquefaction capacities and create the conditions for localising the production of equipment essential for its production, storage and transportation, and this creates work for domestic industrial enterprises.
I know that such work is being carried out now. Moreover, it should be carried out quicker so that future LNG projects are based on domestic equipment and technology as much as possible.
And one more point. To diversify the defence industry, I suggest considering the potential participation of defence companies in projects on localising and producing high-tech products for gas companies.
And naturally, in conclusion I would like to wish Yamal LNG success in implementing all of its plans – the second, third and the unexpected fourth line. And, of course, I wish you success in implementing the next phase, Yamal LNG-2.Thank you. Let’s start the discussion.
Ceremony of first tanker loading under the Yamal LNG projectVladimir Putin launched the loading of the first gas tanker at the Yamal LNG plant. At the President’s command, the fuel began to pump into the tanks of the Christophe de Margerie.
December 8, 2017
16:45
Sabetta
Speech at a ceremony of first tanker loading under Yamal LNG project
President of Russia Vladimir Putin: Colleagues, friends,
This is a remarkable day for us all. There are no random people here. I congratulate you all, the entire huge team of NOVATEK all those who worked on this project, and all those who have just got on-board and are now working, on this wonderful occasion, the first loading of the gas carrier, a new tanker named after our friend Mr de Margerie. Unfortunately, he is not with us today. He was one of the pioneers of this project, but we have a tanker named after him.
This is an extremely important sector for Russia. This is not just an important event in our country’s energy sector, or gas production and liquefaction. This is a more ambitious project. What I mean is that we are faced with the enormous task of developing the Arctic and the Northern Sea Route.
Someone has already mentioned the number of jobs created across the country – more than 100,000. Over 30,000 people worked here alone during the peak period, and about 30,000 are working now. I just had a chance to talk with the people who work at this facility. They themselves are saying that personnel is one of the key issues. We need to train employees. We had no reason to train them earlier, since we did not possess this competence, and did not work in this area previously.
We do now. This is not only about mineral extraction and building such gas liquefaction plants. It also means further development of nuclear shipbuilding. Just yesterday, during the Security Council meeting, we discussed our further plans for building the nuclear icebreaker fleet. This is yet another competence that we have and that we will further develop and improve, because we need special-class vessels.
Yesterday, we spoke about building such vessels, which are called Leader and which can break ice of any thickness, absolutely any. What does this mean? This means that the Northern Sea Route and an enterprise advantageously located here can operate and ship its goods to consumers across the world all year round.
Even now, the eastward route is open for six to seven months, and the westward route already year round. With the icebreaker fleet, which I just mentioned – and it is being built and gradually put into service, one of the 60 megawatt vessels will be commissioned soon – and later on, with the development of these projects, shipments from here will be possible all year round. This means Russia will develop the sea route in the medium and long term.
All this is interconnected and secures Russia’s future, the future of its economy. This is certainly a complex project, and we have good people here in this room, good professionals, who warned me at the beginning of this journey: “Do not do this.” When asked why – the first, second, third – the reasons they cited were all really serious. But those who started this project took the risk, and the risk proved to be justified, and they achieved success.
This is only the first part of the project, the first phase of a large 16.5 million tonne project. I am confident that the second phase will be implemented ahead of schedule, as early as next year, and most likely, the third phase will also be completed ahead of schedule, also at the end of next year, at the very least in early 2019. And what is especially important, the fourth phase is being planned already, exclusively with Russian technologies.
Now, speaking here before you, I would like to thank our foreign friends and foreign partners (many of them are with us in this room), because without their help, without their trust in their Russian friends and partners, this project would not have happened either. I am referring to both financing and technologies. The project involved companies from the East, from Europe, all of them took an active part in it. And today's shipping, the first shipment, is our common victory. I very much count on them continuing to work together, in this case for the benefit of global energy development.
And I would like to thank the Russian side for their significant contribution through implementing this project, their significant contribution to attaining our major goals for the development of the Arctic as a whole.
Thank you very much. I am sure that this is only the first step in our magnificent joint work.
Thank you.
Visit to Yamal LNG plantDuring his trip to the Yamal-Nenets Autonomous Area, Vladimir Putin toured the construction site of the second and third phase of the Yamal LNG plant and met with employees.
December 8, 2017
16:15
Sabetta
Visit to Yamal LNG plant.
The Yamal LNG project is being implemented at the Yuzhno-Tambeyskoye field (Yamal Peninsula) and involves the launch of three production lines to produce liquefied natural gas with a capacity of about 5.5 million tonnes per year each. So far, the first phase of the plant has been put into operation. The second and third phase will open in 2018–2019.
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Conversation with Yamal LNG plant employees
Question: I don’t suppose the northern lights lit up the road for you.
President of Russia Vladimir Putin: No, I did not see the northern lights. I saw only the glow of your plant. A real high-tech aurora borealis.
Question: How do you like the scale of it?
Vladimir Putin: It is great. Impressive.
Meeting with Yamal LNG employees.
Question: Did you have the chance to appreciate the scale of the project on site?
Vladimir Putin: Yes. We took a drive around the sites and had a look at them. Your colleagues told me about what was done and how, so I am in the loop.
Remark: It is one thing on paper, but seeing is believing. Photos do not provide the entire picture.
Vladimir Putin: I have been to the north many times to tour Gazprom sites. Powerful modern production facilities were built in the north, but you have the latest one here, which is new for Russia and the rest of the world.
Remark: Exactly.
Vladimir Putin: I will get back to it later. I remember how I was dissuaded in every way from supporting this project.
Question: In 2010, you supported it. Seven years have passed since then. Do you think we accomplished what you believed in from day one?
Vladimir Putin: Of course. Today is the first shipment. However, there were a lot of objections. If we followed all of them, we would be better off doing nothing. In general, really, you know, since you work here, that there are many difficulties.
Question: Mr President, after the first step, which we are witnessing today, how do you see the development of the LNG business in Yamal?
Vladimir Putin: We will certainly keep expanding it. Mr Mikhelson [Chairman of the Management Board of NOVATEK] spoke about Yamal LNG-2 based on modern innovative Russian technology. The fourth line is planned to be built here, but this time using only Russian technology, which, as your colleagues told me, will be 30 percent cheaper. Are you aware of this?
Meeting with Yamal LNG employees.
Remark: Yes, but there are nuances.
Vladimir Putin: There are nuances related to summer temperatures, but overall it would be very interesting, of course, if we could create competences which did not exist before. It would be just great. This is, perhaps, the largest step forward in developing the Arctic. As Lomonosov once said, Russia will expand through Siberia. Now we can safely say that Russia will expand through the Arctic this and next century. This is where the largest mineral reserves are located. This is the site of a future transport artery that I am sure will be very good and efficient – the Northern Sea Route.
So, the step you have taken is essential for the country, not just the energy sector or LNG projects, but in general. It is about new jobs, infrastructure development, and comprehensive development. To reiterate, this is critical for Russia.
Remark: We are ready to support further steps but we have some apprehensions about workforce. We have some problems with it. We are trying to find the best resources for such projects that require education and deep understanding of the discipline in which we are looking for new colleagues. But, regrettably, it is very difficult to choose the right personnel in the market today.
Vladimir Putin: But you have chosen them.
Remark: But they came from all over the country. We looked for them in the entire country.
Vladimir Putin: So what? You will continue choosing them in the same way.
Remark: The head has very many plans but this team is limited. This is a problem. We must further develop education – both secondary and higher – so that we are not left alone.
Vladimir Putin: Of course. Look, we did not possess this competence before. In effect, these are the first steps. For what projects were we supposed to train them? There was no reason when there were no projects. Now they are appearing.
Do you know what else is very important? It was very important for you to make it and now you have, this is obvious. Now that you have seen that you have made it and that projects will multiply, you know secondary and higher education will be set up.
Remark: We hope that the Minister of Education will issue a relevant instruction.
Vladimir Putin: Yes, of course.
Meeting with Yamal LNG employees.
Remark: We can go over the details both here and in Moscow.
Remark: But take warm hats with you.
Vladimir Putin: No doubt, it will be essential to consider your experience. It is necessary to establish what is required of specialists at the given jobs and educate them accordingly.
Remark: Mr President, we can compile a list of professions that are in short supply.
Vladimir Putin: This is exactly what should be done. Specialists should be trained for specific jobs as engineers and workers, not just trained without any sense of where they will end up.
Remark: Because we are eagerly awaiting them.
Vladimir Putin: I think they will hear you and come to you.
Remark: I hope so.
Vladimir Putin: We have been holding another student contest. We have a great many talented young people, so if they realise (and they will see it now and realise) that it is needed, that there are interesting and promising jobs, there will be a response from the education system.
Remark: It should be also covered by the media in some way because as we travel around the cities I notice that people largely believe it is very hard to get involved in our business. But we are ready to receive young people with doors wide open, we are ready to train them.
Vladimir Putin: You have higher wages, so they think they won’t be taken on here, only through good connections. What is your average wage?
During the meeting with Yamal LNG employees.
Remark: I think the question should be addressed to our bosses.
Remark: It depends. There are workers, there are highly qualified engineers. On average, it is around 120–150 thousand rubles.
Vladimir Putin: And the ceiling?
Remark: The ceiling is very high.
Vladimir Putin: And I am not even asking you about healthcare.
Remark: It might be 400, yes.
Vladimir Putin: You said it right – when this is made explicit in the media, they will understand that the conditions are not easy, they are tough. What can I say, it is the polar night. What is the temperature now? Minus 25, I think, at least.
Remark: Twenty-five, and a bit of a breeze.
Vladimir Putin: A bit. There is something to it, too. You see, it is working under such harsh conditions, testing oneself, working on such up-to-date facilities as you have – this is an attraction for professionals, for people who commit themselves to a certain trade. This is why I think there will be many people willing to try. These are first steps but they are good, successful steps. And this is crucial.
Remark: Thank you.
Question: I have a question that touches on a problem. The Olympics are coming. We are worrying, we are concerned about our athletes. Which sport are you a fan of?
Vladimir Putin: Letme repeat, it is judo.
Remark: That is not a winter sport.
Vladimir Putin: Alpine skiing and ice hockey.
Question: What radius do you ski?
Vladimir Putin: Radius? I don’t know the radius.
During the meeting with Yamal LNG employees.
Remark: Ski geometry. My son is very curious.
Vladimir Putin: Well, modern ones.
Question: Are they 12 metres or 16?
Vladimir Putin: I don’t know about themetres. You see, I am an amateur unlike your son (Laughter).
Remark: We will be cheering together. We like hockey here.
Vladimir Putin: I learnt to get up on skates just a few years ago. I could not do it at all.
Question: Will you support a small series of amateur games on the Arctic ice?
Vladimir Putin: This is exactly what I have been doing, supporting.
Question: Are you willing to take part?
Vladimir Putin: Here? With you?
Remark: Yes.
Vladimir Putin: At minus 25? (Laughter). You are the ones who are used to it.
Remark: We had a tournament, right on the ice of the Kara Sea, it was minus 17 but the guys were playing, it was really cool.
During the meeting with Yamal LNG employees.
Vladimir Putin: You should take care because the air you breathe is cold, you can get a cold. You can simply breathe in too much cold air.
Question: Do you keep the Christmas fast?
Vladimir Putin: Fasting? You know, warriors and travellers may skip fasting, and I am nearly always on the road, and I am also the Supreme Commander-in-Chief, so it is not always doable.
Question: Mr President, every time I come home after a month-long shift, tired after a long trip, my wife tells me, ”Look, the President flies a lot, but he is always in great shape.“ Perhaps you can share a tip or two on how to take care of yourself after a lot of travelling?
Vladimir Putin: I have already said it many times, and you yourself are aware of it. You can do whatever you like, just in moderation. Also, always remember to stay active.
Question: Do you like to read while travelling, maybe? Perhaps, you can recommend something to us, give some advice?
Vladimir Putin: Do you want me to give you what I was reading today on the way here? You will fall asleep in two minutes. I, too, have to struggle each time I start reading. But I have to read things. Today, I was reading some reference materials, even though I think I know it all, but I still read them.
Question: Do you prefer historical literature?
Vladimir Putin: I love history, it is true, you guessed right.
Question: Maybe you could share something you believe, or some life advice? What do you do to look so well? Does something about your work help?
Vladimir Putin: You know, in life work helps. If someone is focused on achieving a personal goal, or a cause that you dedicated yourself to, it always motivates, it always pushes you forward, and it always makes you think about what else needs to be done, how you need to work on yourself in order to be up to the task at hand. This is critical. If a person is motivated in his work, if he controls himself, this helps him get his act together, disciplines him. However, it is more difficult for someone without a purpose. You know, if you lack something to hold it all together… The work here is interesting, right?
Meeting with Yamal LNG employees.
Remark: Yes, of course,
Vladimir Putin: Right. There are difficulties, there is an additional burden, but it is interesting. And this interest makes you tick. You have found yourself to some degree. Everyone must strive to find himself. It is important.
Remark: Mr President, we can show you around a bit, since we started talking about work.
Vladimir Putin: I think we should. Or else the tanker will leave without us.
With President of the Syrian Arab Republic Bashar al-Assad.
