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The meeting was attended by Chief of Staff of the Presidential Executive Office Sergei Ivanov, presidential aides Andrei Belousov and Igor Levitin, Energy Minister Alexander Novak, Transport Minister Maxim Sokolov, Presidential Plenipotentiary Envoy to the Urals Federal District Igor Kholmanskikh, Yamalo-Nenets Autonomous Area Governor Dmitry Kobylkin, Deputy Finance Minister Andrei Ivanov, and the CEOs of NOVATEK and Sovcomflot.

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President of Russia Vladimir Putin: Good afternoon, colleagues,

Since we are here in the Yamal Peninsula we’ll talk about a major undertaking: the Yamal LNG project. Its purpose is to create modern facilities for the production of liquefied natural gas, right here in the Yamal Peninsula, in the South Tambeyskoye field. We’ll look separately at how things are proceeding with respect to building a key logistical element of the project, namely the Sabetta seaport.

Without any undue exaggeration, the industrial and infrastructural development of the Yamal Peninsula holds national importance. It will allow us to tap the rich – but still inaccessible – deposits here, to create new jobs, industries and hydrocarbon processing centres. In turn, these will act as a major impetus for the socioeconomic development not only of the Yamal-Nenets Autonomous Area, but the entire Urals and Western Siberia. In fact, this development will probably even have important outcomes for the entire country.

Let me remind you that the project’s resource base, the South Tambeyskoye gas field, has natural gas reserves amounting to 1.3 trillion cubic metres. Twenty percent of Russia’s proven natural gas reserves are concentrated in the Yamal Peninsula.

I would also note that the Sabetta port should act as a main point of call along the Northern Sea Route. This is the shortest route between Europe and Asia, and it has become busier in recent years.

Compared with 2011, the amount of traffic along the Northern Sea Route increased by 53% in 2012, and exceeded 1.26 million tonnes. In 2013, this figure has already reached 1.5 million tonnes. By 2015, volumes are projected to reach 4 million tonnes. The construction of a modern Arctic port would consolidate this trend.

The Yamal LNG project is also important to us as a successful example of public-private partnership that we must actively replicate. Let me recall that by the beginning of September 2013 private investors had already invested more than 60 billion rubles in the project.

In turn, public funds are financing a number of infrastructure projects, including Sabetta airport, which is due to open in 2014.

The federal budget has also set aside nearly 47.3 billion rubles for the construction of a seaport. These funds will finance dredging the waters of the future port in order to create a navigable channel in the Gulf of Ob, something that is already underway. All of this will enable private investors to start building port terminals as of 2014.

Let me recall that experts predict that the production of liquefied gas, 5.5 million tonnes, is expected to start in 2017. By this time the Sabetta port should begin handling and shipping hydrocarbons.

At present all major work is proceeding according to schedule. At the same time I would like to draw your attention to a few important points.

First: the Yamal LNG port is a complex structure and a challenging project. We have to build on swamps and tundra, where there is permafrost. Problems will arise that can be difficult to predict in advance. Naturally, this can result in higher costs. But I would like to warn you now: all proposals for revising the budget must be verified and properly calculated.

Second: while building port infrastructure, I would ask you to use the most advanced technologies that are both reliable and affordable.

Furthermore, there must be strict compliance with environmental standards. I would ask you to develop a methodology for evaluating measures to ensure environmental safety, based on the amounts and actual cost of work undertaken, in order to optimise federal spending on construction and ensure environmental safety.

Finally, the fourth point. An important condition for the successful implementation of the Yamal LNG project is efficient cooperation between all participants. By this I mean the representatives of federal agencies, regional authorities and private investors.

I expect specific proposals from you: what steps need to be taken at the federal, regional and corporate levels to ensure further effective measures to implement this project.

Let’s get to work.

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