Novatek lands more northern licences
Friday, Sep 01, 2017
RUSSIA’S biggest independent gas producer, Novatek, secured subsoil licences to three gas fields in northern Yamal-Nenets last week, expanding its resource base for a planned LNG hub in the region.

In a statement on August 25, Russia’s Natural Resources Ministry announced that the independent gas producer’s local arm, Novatek-Yurkharovneftegas, had won an auction for rights to two deposits on the Yamal Peninsula. Verkhnetiuteyskoye and West-Seyakhinskoye are located near to Novatek’s South-Tambeyskoye gas field and are estimated to contain 882.4 bcm of gas and 68 million tonnes (612 million barrels) of oil and gas condensate in C1+C2+C3 reserves.

Novatek-Yurkharovneftegas paid 6.425 billion rubles (US$110 million) for the 27-year licence for the fields, as against an initial asking price of 5.84 billion rubles (US$100 million).

The ministry also noted that in a separate auction, another subsidiary of Novatek, Arctic LNG-2, had bagged a 30-year licence for the Stormovoye deposit, situated on the Gydan Peninsula on the opposite side of the Gulf of Ob.

Arctic LNG-2 spent 1.04 billion rubles (US$18 million) on acquiring the permit, slightly more than the initial price of 945.2 billion rubles (US$16.1 million). Situated near to Novatek’s Utrenneye deposit, Stormovoye is believed to hold 479.4 bcm of gas and 39 million tonnes (351 million barrels) in C1+C3 resources.

Many observers had viewed Novatek’s acquisition of the trio of deposits as a foregone conclusion.

The Natural Resources Ministry had stipulated that only companies already operating in the area and involved in local LNG production could take part in the auctions. This effectively singled out Novatek, which operates the region’s only LNG export project on the Yamal Peninsula.

The gas company aims to launch the first of three 5.5 million tpy trains at the Yamal LNG plant later this year.

Novatek won an auction for the nearby Gydanskoye field earlier this year under similar conditions.

The gas producer is seeking to expand its resource base in the region to underpin the construction of further LNG export capacity.

Helping to fulfil this goal, last year Novatek-Yurkharovneftegaz acquired subsoil rights to seven new plots on the Yamal and Gydan peninsulas.

On Gydan, Novatek has plans to commission a second LNG liquefaction plant, known as Arctic LNG-2. A final investment decision (FID) on Arctic LNG-2 has not yet been reached, although Novatek has indicated that the facility could be brought on stream in 2023 with an output of 12-16 million tpy.

This NewsBase commentary is from our GLNG publication. To sign up for your free trial, click this link: http://newsbase.com/publications/glng-global-lng

Read more NewsBase top stories via this link: http://bit.ly/2h95NUx

Find out more about Asian Oil and Gas from NewsBase