Novatek in ‘Advanced’ Talks to Sell Yamal LNG Stake
(Corrects Mikhelson’s title in last paragraph of story published yesterday.)
OAO Novatek is in “advanced” talks to sell a stake in its Yamal liquefied natural gas development to a group of companies after earlier agreeing to a preliminary deal to offer 20 percent to China National Petroleum Corp.
“Hopefully in the near term we will have positive news to report in terms of additional equity stake,” Chief Financial Officer Mark Gyetvay told analysts today on a call, without disclosing the names of the companies or any timeframe.
Novatek, Russia’s second-biggest natural-gas producer after OAO Gazprom, is building the $20 billion Yamal LNG project in the Russian Arctic. It agreed to sell the stake to CNPC in June after previously adding Total SA (FP) as a strategic partner, also with 20 percent. Novatek is ready to cut its holding to as low as 51 percent if potential partners offer markets for the gas.
The CNPC deal, which also stipulates the sale of at least 3 million metric tons of LNG a year, will be completed by October.
The final investment decision on the project is expected in the third quarter or start of the fourth quarter, and marketing of the remaining LNG volumes is “well advanced,” Gyetvay said. “Demand for offtake has been pretty strong,” he said.
Novatek plans to secure agreements to supply LNG to Asia this year after signing the accord with CNPC, Chief Executive Officer Leonid Mikhelson said in June.
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