Artur Zurabyan, the head of the International Arbitration and Dispute Resolution Practice of the ART DE LEX law firm, commented on possible alliance between Rosneft and Alltech

By the end of September, Rosneft and Alltech plan to set up a joint venture firm Pechora LNG for producing and exporting liquefied natural gas.

The government of the Russian Federation opposed issuing licenses for Pechora LNG, but Rosneft and Dmitry Bosov of Alltech stated that the two companies still will establish a joint venture by the end of September. According to RBC, Pechora will not have an export license, but it can sell liquefied natural gas through Rosneft subsidiaries. The source of the problem is Gazprom, which objected to Pechora LNG obtaining an export license because it would heighten competition among Russian firms for foreign markets.

According to Artur Zurabyan, the head of the International Arbitration and Dispute Resolution Practice of the ART DE LEX law firm, Pechora, as a joint-venture firm of Rosneft and Alltech, can sell liquefied natural gas through Rosneft. He noted that “the company of Igor Sechin has a license for exporting LNG, the same right that Gazprom, Gazprom Export, and Yamal LNG have. If Rosneft exports Pechora gas, the decision-making process would rest with Rosneft. This may deter Alltech and potential investors of the project, which will require approximately USD 6 billion in investments. Perhaps Rosneft is awaiting an official government statement in order to propose alternate terms and conditions for partnership.”

Furthermore, the Duma will consider legislation that may further liberalize the export law for liquefied natural gas that would benefit Pechora LNG.