Russia’s Rosneft and U.S.'s Exxon Mobil plan to build a liquefied natural gas (LNG) plant in a consortium with Indian and Japanese partners.
Rosneft and Exxon unveiled plans in 2013 to build a LNG production site in Russia’s Far East, but the plan failed to materialize owing to a number of reasons, including sanctions against Moscow for its role in the Ukraine conflict.
However, recent talks between these two companies has given indication that they are finally ready to go ahead with this estimated $15 billion project. Although initially they had opposed adding any other consortium members to execute this project, certain financial and geopolitical risks (like sanctions, rising costs, and limited access of Russian companies in the financial markets) have made it sensible to bring-in two new players -- Japan’s SODECO and India’s ONGC Videsh.
These four companies would form a consortium and would likely enter into the Sakhalin-1 agreement to carry out the LNG plant project within the framework. Exxon and Japan’s SODECO are each expected to enjoy 30% stakes in the project, while the remaining 40% is expected to be equally shared between Rosneft and India’s ONGC Videsh. Although nothing to date has been officially confirmed by any of the companies, it is expected that the financing of the LNG plant would be shared between the participants and the project could start in Q1 2019.