Asia eyes Russian Arctic gas as Australian costs climb

But by last November, three of seven Australian LNG projects in early stages of construction had already announced cost hikes averaging more than 20 percent, mainly because of rising labour outlays and the strong Australian dollar.

And industry experts say few additional projects are likely as investors are turning towards lower-cost locations such as North America and East Africa.

Novatek and Total plan their first 5 million tonne per year Yamal LNG line in 2016 to liquefy gas  from the 418 billion cubic metre (bcm) South Tambei field on the Yamal Peninsula.

They hope to raise capacity to 15 million tonnes by 2018 and ship the LNG east through Arctic seas using special icebreaker vessels. But a final investment decision on Yamal is two months overdue.

GOVT DECISION SOON?

Novatek has asked the government for an exemption that would break the Gazprom monopoly. But Gyetvay played down the importance of any looming liberalisation to the future of Yamal, in which French international oil company Totalalready holds a 20 percent stake.

"There've been discussions over the last week with the Russian government about liberalising the LNG markets and we'll wait for them to come back to us, supposedly by the end of March," he told Reuters on the sidelines of the International Petroleum Week conference.

"(But) the interest in our project is that it's going to deliver 15 to 16 million tonnes (per year) of LNG around

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