Page 133 - RusRPTJul21

agreements with all of its shareholders (i.e. Novatek, Total, CNPC, CNOOC and the consortium of Mitsui and JOGMEC) for the entire production volumes. Out of its share (60% of 19.8mnt nameplate capacity, or 11.9mnt/a), Novatek has already announced that it has signed delivery contracts for 0.2mnt/a of LNG with Shenergy and for 1mnt/a with Repsol. It also has a non-binding agreement for 1mnt/a with Vitol. So, combined, the disclosed agreements amount to some 31% of Novatek’s share of LNG from the project. If Novatek also locks in 6mnt/a supplies to Sinopec and Vietnam, the share of contracted volumes might grow to around 82%.
● Other
Transneft’s management held a conference call devoted to its 1Q21 IFRS results. The key highlights are as follows.
· Transneft has de facto transitioned to a new dividend policy (50% payout of unadjusted IFRS net income) but is waiting for the government decree in order to change its dividend policy document.
· This week, Transneft has made a RUB 2bn compensation payment related to the oil contamination incident in 2019. This compensation was related to Rosneft’s deliveries to Total and Mozyr, and to Lukoil’s deliveries to the Mozyr refinery. Overall, Transneft has paid RUB 13.8bn in connection with the incident. Transneft’s management now guides that all payments related to the event will likely be resolved in 2022.
· Transneft’s expects to transport 439-440mnt of oil and 37.1mnt of oil products in 2021. However, the company remains cautiously upbeat in relation to volumes.
· Transneft’s long-term capex guidance excluding new projects is close to RUB 250bn/a (at 2022 prices).
The company had previously guided that all payments in relation to the Druzhba contamination incident would be made by mid-2021.
The change in the dividend policy was guided earlier and does not come as a surprise. We calculate that 1Q21 IFRS net income implies a RUB 3,479/share contribution to FY21 DPS, for a 2.4% non-annualised DY (Transneft pays out dividends on an annual basis).
The oil transport guidance for 2021 is slightly below our expectations (442mnt) and roughly on par with 2020. At the same time, the company stated that it was upbeat with regard to volumes.
133 RUSSIA Country Report July 2021 www.intellinews.com