Russia’s Novatek asks government to cut taxes for Yamal LNG – Kommersant

Recasts, adds detail

MOSCOW, April 11 (Reuters) – Russia’s Novatek NVTK.MM has asked the government to grant its key Yamal LNG project a deferral of additional profit tax for 2022 while simultaneously cutting its rate, the Kommersant daily reported on Tuesday, citing Novatek’s letter to the government.

Novatek did not immediately reply to a request for comment. Yamal LNG produced almost 21 million tonnes of the super-chilled gas in 2022.

Yamal LNG is facing an increase in the profit tax for 2022 of 40 billion roubles ($489 million) due to the finance ministry’s new approach regarding exchange rate differences, the newspaper said.

It comes in addition to an increase in the profit tax rate for LNG projects to 34% from 2023, which, according to Novatek, jeopardises the financing of the Arctic LNG 2 and Obsky LNG projects.

The government is seeking funding to plug a budget deficit that stood at 2.4 trillion roubles ($29 billion) in the first quarter of the year, as Moscow spent heavily and energy revenue fell.

Novatek aims to launch the first of three lines of the $21.3 billion Arctic LNG 2 project at the end of this year. Each line will have a production capacity of 6.6 million tonnes per year.

($1 = 81.8000 roubles)

(Reporting by Reuters; Editing by Jacqueline Wong, Kirsten Donovan)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.