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Novatek may seal sales contracts for Yamal LNG in second quarter

BY JAMES MARSON

MOSCOW -- Russia' s largest independent gas producer Novatek hopes to finalize framework conditions for sales of the vast majority of the liquefied natural gas from its Arctic LNG project in the second quarter, said Chief Executive Leonid Mikhelson.

Novatek is in "advanced talks" with potential clients, particularly in China and India, on selling LNG supplies from the Yamal LNG project, Mr. Mikhelson said during a conference call on Monday. Customers are prepared to sign contracts for around 80% of gas from the project, which is scheduled to launch in 2017, he added.

Novatek is banking on Russia' s government ending state-controlled Gazprom' s  monopoly on gas exports and allowing other firms to sell LNG on foreign markets, which are more lucrative than Russia' s. Last month, President Vladimir Putin instructed government officials to consider liberalizing exports to boost Russia' s share of the global LNG market from 3.6%.

Finalizing contracts on volumes and prices for the LNG will depend on the government permitting exports, Mr. Mikhelson said.

Novatek Chief Financial Officer Mark Gyetvay said the company intends to take the final investment decision on Yamal LNG, a joint project with France' s Total, in the coming months. The project, located in Russia' s Arctic, is expected to produce its first gas at the start of 2017.

Dow Jones Newswires

03/11/2013

 

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