The Baltic will be opened for China

Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, commented to the Kommersant newspaper on the participation of Chinese companies in the LNG plant construction in the Leningrad Region.

Sergei Kondratiev believes that Chinese companies may consider investing in the project, but cooperation in the supply of equipment and engineering seems more likely.

“Due to sanctions risks, the economics of many projects in the production of LNG and gas chemistry now remain incomprehensible, and therefore entry into capital is possible with the provision of state guarantees and the provision of unchanged tax conditions (benefits)," he says. "This practice is not something unique — Exxon followed the same approach when discussing investments in VNHK in 2017-2018.”

At the same time, Mr. Kondratiev notes, Chinese companies will be more interested in projects in the Far East and the Arctic with clear sales in the Asia-Pacific region, while projects in the Baltic may face difficulties if the cost of transportation remains high, and the EU and US sanctions do not will be removed.