Novatek Says Mitsubishi, Mitsui Interested in Yamal Project

Mitsubishi Corp. and Mitsui & Co., Japan’s two biggest trading companies, are interested in joining OAO Novatek’s $20 billion liquefied natural gas project, the Russian company’s Chief Executive Officer Leonid Mikhelson said.

The plan to build the plant on the Yamal Peninsula in Russia’s arctic region will be discussed with officials at Mitsubishi, Mitsui, Itochu Corp., Tokyo Electric Power Co. and Tokyo Gas Co., Russian billionaire Mikhelson said in an interview in Tokyo. Novatek is visiting Japan with Russian Energy Minister Alexander Novak.

Novatek, which holds 80 percent of the Yamal project with French company Total SA owning the rest, plans to build the LNG plant by 2017. The company is seeking additional investors in Europe and Asia, though it plans to keep at least 51 percent of the venture.

“We are considering projects in various countries,” said Tokyo Gas spokesman Minoru Iwashita when asked about its interest in the Yamal project. He declined to elaborate. The Yamal venture is among projects under consideration, said an Itochu official, who asking not to be identified citing internal policy.

Spokesmen at Mitsui and Tokyo Electric declined to comment. Hiroyoshi Shibuya, a spokesman for Mitsubishi, wasn’t immediately available.

Novatek and the Japanese companies are still in the early stages of negotiations and are unlikely to strike a deal soon, said a person familiar with the matter, who declined to be identified because the negotiations are private.

Novatek may offer a stake in the Yamal project to Chinese companies, two people with knowledge of the matter said in February. Novatek is also in talks with companies including Electricite de France SA about participating, Mikhelson said in January.

The Russian company is in an advanced talks on LNG sales from Yamal and about 80 percent of the gas is ready for signing contracts, Mikhelson said on a March 11 conference call.