CNPC to Join Novatek’s Yamal LNG Project With 20% Stake
China National Petroleum Corp. agreed to acquire a 20 percent stake in OAO Novatek’s Yamal LNG project, allowing Russia’s second-biggest natural gas producer to tap the Asia market.
CNPC will join Novatek and France’s Total SA in the natural gas liquefaction venture, under an agreement signed today in the presence of Russian President Vladimir Putin at the St. Petersburg International Economic Forum.
Novatek, controlled by billionaires Leonid Mikhelson and Gennady Timchenko, and state-controlled OAO Rosneft, the world’s biggest publicly traded oil producer, are challenging an export monopoly held by OAO Gazprom while seeking to ship LNG abroad. Rosneft signed a non-binding LNG deal with Vitol Group today.
Mikhelson, the CEO of the smaller gas producer, also signed a long-term agreement to ship LNG to China as Novatek seeks to start liquefied natural gas output at the end of 2016. In a bid to raise funds for the $20 billion Yamal LNG project above the Arctic Circle, the company has said it’s ready to reduce its stake to as little as 51 percent to partners that offer markets for the fuel. Total, a Novatek shareholder, owns 20 percent of the project, and Novatek holds the remainder.
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