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NOVATEK says Russia may agree to sell liquefied natural gas to China from Yamal

Russia's NOVATEK oil and gas company says during the visit of Russia's President Vladimir Putin to China, due in May, the two countries may sign a contract with CNPC (China National Petroleum Corporation) on LNG (liquefied natural gas) supplies from Yamal, the company's head Leonid Mikhelson told reporters on Friday.

The document will contain exact pricing, he said adding as of now 75-78% of future LNG from Yamal had been contracted already. The company does not rule out it may contract the entire 100% of the liquefied natural gas.

Mikhelson commented on the situation around a possible, third, shareholder in the Yamal LNG project. As for the project's financing, the company does not require another partner. Though, in case of attractive offers, NOVATEK may lower its share in the project from the current 60% to a control stock.

Yamal LNG, in which NOVATEK holds a 60% equity stake (France's Total - 20%, and CNPC - 20%), holds the license for exploration and production at the South-Tambeyskoye field valid until 2045.

The South-Tambeyskoye field was discovered in 1974 and is located in the north-eastern portion of the Yamal Peninsula. The field has five shallow gas horizons and 37 deeper gas condensate horizons. The depth of the horizons varies from between 900 to 2,850 meters. The field development plan provides for the drilling of approximately 200 wells at 19 well pads, construction of a gas gathering pipeline system, gas treatment facilities and a liquefaction plant.

The liquefaction plant will include three trains of 5 to 5.5 mmt annual capacity each as well as LNG storage facilities. The shipment infrastructure will include a jetty with two tanker loading berths at the port of Sabetta equipped with ice protection facilities. LNG carriers of special design ARC-7 will be used to transport the LNG to international markets.

[Source: Itar Tass, Moscow, 18Apr14]

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