Page 9 - GLNG Week 44 2020

GLNG COMMENTARY GLNG

Novatek remains bullish

on long-term LNG outlook

Novatek believes current low gas prices are unsustainable, and sees

LNG demand doubling by 2040 on the back of Asia-Pacific growth

PERFORMANCE RUSSIA’S biggest independent gas producer Gyetvay said.
Novatek remains bullish on long-term prospects “We have always remained optimistic dur-
WHAT: for gas, despite prices falling to unprecedented ing this extraordinary year,” he said. “We have
Novatek remains lows this year in the wake of the coronavirus stated many times that low gas prices were not
“absolutely committed” (COVID-19) pandemic. sustainable.”
to producing 70mn tpy of Speaking to investors on October 29, Novatek Low prices are more reflective of unseasona-
LNG by 2030. CFO Mark Gyetvay said the LNG exporter bly warm winter weather over the past two win-
‘remains absolutely committed to its portfolio ter seasons as well as high levels of storage, while
WHY: strategy to deliver up to 70mn tonnes of LNG” COVID-19 lockdowns and the resulting eco-
Despite weaker growth per year by 2030. nomic fallout have played a lesser role, he said.
this year, the company “Energy transition combined with grow- “Moreover, we saw significant new LNG vol-
is still bullish on the ing economic activities in Asia and Pacific will umes come to market over the past several years
long-term outlook for LNG remain significant contributing factors to future from the completion of global projects,” he con-
demand. LNG demand growth, as well as supporting nat- tinued. “It takes time for the market to absorb
ural gas as the primary clean-burning fossil fuel these new LNG volumes, as supply and demand
WHAT NEXT: within the future total energy mix,” he said in a is never matched perfectly.”
Novatek’s next major conference call. There have so far been no final investment
export plant Arctic LNG-2 Novatek anticipates global LNG consump- decisions (FIDs) on new LNG production capac-
is still on track for launch tion reaching 365mn tonnes in 2020, up 2% ity this year. This could make 2020 the first year
in 2023, but some of its year on year, and sees it doubling to over 700mn in over two decades where there have been no
smaller projects have tonnes by 2040. Considering the circumstances, project approvals. But this lack of FIDs should
slipped behind schedule. Gyetvay said the growth this year was a “posi- help tighten supply post-2025, Gyetvay said.
tive development,” and he ruled out any struc-
tural changes to LNG demand as a result of the Financials
pandemic. Novatek has taken a significant hit to revenues
In the shorter term, the CFO said that while this year, but it has fared better than many inter-
gas prices were still lower than the pre-corona- national rivals thanks to its low costs and stable
virus level, the recovery is underway. A rise in revenues from domestic sales.
forward curve prices for the upcoming winter The company saw its revenues drop 23.6%
reflects expectations of colder weather ahead, year on year in the 9M of January to September

Novatek’s CFO, Mark
Gyetvay

Week 44 06•November•2020 www. NEWSBASE .com P9