OREANDA-NEWS. October 20, 2009. The Russian government is pondering a return of export duties on liquefied petroleum gas (LPG), according to Kommersant-Daily. Until they were abolished in February 2009, the duties on LPG had been linked to oil prices (similar to crude export duties). Given the recent recovery in oil prices, LPG exports became significantly more profitable than they had been at the beginning of 2009. According to Kommersant, if the LPG duties are restored, they may be based upon a new formula, which is not necessarily linked to oil prices, reported the press-centre of OTKRITIE FC.

View: We believe that the government starts charging the LPG export duty again, it would be marginally negative for both Gazprom and NOVATEK. We note that the LPG duty has nothing to do with gas condensate (the key liquid export of NOVATEK), which has been subject to the same export duty as crude oil.