Novatek Wins Deal to Supply Gas to EON Russia Plant

OAO Novatek, Russia’s second-largest natural-gas producer, won a 283.9 billion-ruble ($8.49 billion) contract to supply a Siberian power station.

Novatek will deliver gas to OAO EON Russia’s Surgut-2 plant from 2014 through 2027, the Tarko-Sale, Siberia-based company said today in a regulatory filing, without disclosing volumes.

The producer is vying with larger competitor OAO Gazprom and oil and gas company OAO Rosneft to add customers in Russia as the state increases regulated prices. Novatek and Rosneft are limited to domestic gas sales by Gazprom’s monopoly on exports.

Novatek said in June it may review its target for domestic market share. The revised goal will depend on government decisions about the gas-extraction tax, the growth of regulated prices and fees for using Gazprom’s pipe network, Chief Executive Officer Leonid Mikhelson said at the time.

Last year, the company lost a contract with power utility OAO Inter RAO UES to Rosneft, while signing long-term supply deals for about 848 billion rubles of fuel with domestic electricity generators, including EON Russia.

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