Coals to Newcastle*?: Putin offers to sell LNG from Yamal to Saudi Arabia

In the latest twist in the complex and sometimes bizarre tale of Eurasian geopolitics, Russian President Vladimir Putin last week offered to sell Saudi Arabia gas from the newly operational Yamal LNG plant in its Arctic territories.
The offer came as he and the Saudi Energy Minister Khalid al-Falih joined gas  producer Novatek’s co-owner  Leonid Mikhelson at a  ceremony  to watch the ice-class tanker Christophe de Margerie  being loaded  with the first shipment of LNG at t the Arctic port of Sabetta. “Buy our gas and you’ll save oil,” he told the minister.“If we continue to work the way we do, we will turn from being  rivals into partners.” 
Putin’s offer comes despite estimates that more than 95% of output from Yamal LNG for the next 20 years or so has already been pre-sold,  mainly to countries in the Asia Pacific, and it may not have been unconnected to the current stand-off between Saudi Arabia and Qatar – currently the world’s biggest  LNG exporter with a 30% share of the global market – which has seen Riyadh lead an import embargo against Doha in retaliation for its alleged support for terrorist organisations. The Yamal LNG plant (which is 20% owned by France’s Total) is expected to help Russia to impact onQatar’s dominance and to double its share of the LNG market from 4% to 8%.
With Saudi’s Crown Prince Mohammad bin Salman on a mission to diversify the kingdom’s economy away from hydrocarbons, any imported gas would be earmarked as foodstuff for its nascent petrochemical sector.
The rapprochement between Saudi Arabia and Russia has been gathering pace for several months and in October King Salman bin Abdulaziz became  the first ever Saudi monarch to make an official visit to Moscow. Investment deals worth several billion dollars were agreed during the visit, giving a welcome boost to a Russian economy  battered by a combination of  low oil prices and Western sanctions.
At Friday’s ceremony, the Novatek CEO also confirmed that he had discussed gas projects with Saudi officials. He did not disclose any details, although these are likely to have included investments in the  Arctic LNG project on the Gydan Peninsula across the Gulf of Ob from Yamal. Construction is expected to begin there in 2019 with the first of three trains operational by 2023. As with Yamal, natural gas will be exported via the Northern Sea Route. Novatek has already secured backing for the project from the  Chinese National Petroleum Company (CNPC) and China Development Bank.
* Newcastle Upon Tyne in England was the UK’s first coal exporting port and ‘Carrying coal to Newcastle’ was therefore seen as an archetypally pointless activity equivalent  to ‘selling snow to Eskimos’ or  (in this case more pertinently) ‘selling sand to Arabs.’