Page 7 - FSUOGM Week 09 2021

FSUOGM PIPELINES & TRANSPORT FSUOGM

Novatek strikes LNG supply

deal with Shenergy

RUSSIA RUSSIAN LNG exporter Novatek has struck a CNPC and CNOOC Ltd also each have 10% and
deal to supply over 3mn tonnes per year (tpy) of a further 10% is divided between Japan’s Mitsui
Shenergy buys and the super-cooled gas to China’s Shenergy. and JOGMEC.
distributes gas in China, The gas will come from the Novatek-led Arc- This marks the third contract signed by
handling around 10bn tic LNG-2 project, due to start up in 2023, and Novatek’s subsidiary Novatek Gas & Power
cubic metres per year. will be sent to Chinese import terminals on a Asia. It signed its first for 1mn tpy of supply
delivered ex-ship basis. to commodities trader Vitol in 2019. The com-
Novatek CEO Leonid Mikhelson said the deal pany is set to provide a further 1mn tpy to
was part of its strategy “to diversify our client Spain’s Repsol.
base and target end-consumers in the fast-grow- State-owned Shenergy buys and distributes
ing Asia-Pacific region.” gas in China, handling around 10bn cubic metres
“The Chinese market is one of the key regions of supply per year. The company also signed a
in our LNG marketing strategy, and we plan to heads of agreement (HoA) with Malaysia’s Pet-
further increase our supplies of LNG to this ronas in January to receive 1.5mn tpy of supply.
country,” he said. Novatek’s other up and coming project is
Arctic LNG-2’s three trains are due online Obsk LNG, which is anticipated to come online
in 2023, 2024 and 2026, producing a total of in 2024. A final investment decision (FID) is still
19.8mn tpy of LNG at full capacity. Novatek pending, although Mikhelson recently suggested
operates the project with a 60% interest, while the project’s output could be 20-25% more than
France’s Total has 10%, Chinese companies the original plan of 5mn tpy. ™

PERFORMANCE

Gazprom reiterates dividend targets

RUSSIA THE CFO of Russian gas giant Gazprom, Famil per share (10-11% yield) for 2021, and see the
Sadygov, reiterated that dividend payments "the CFO's reassuring message as positive for the
Gazprom will keep to remain one of the company's key priorities, Sber- stock."
its promises, despite bank CIB wrote on February 24 citing the CFO's In December 2020 BCS Global Markets
increased leverage. statements at a meeting with investors. "enthusiastically confirmed" a Buy call on
As reported by bne IntelliNews, despite the Gazprom. The analysts noted that Gazprom's
losses sustained in 2020, the market expected the exports are recovering faster than expected after
company to stick to the current dividend plan a tough year, with European exports seen return-
despite the strain on finances. ing to normal by 2023.
Sadygov again pledged to fully stick with the VTBC in December 2020 also upgraded the
dividend policy payout targets, despite the ele- investment case on Gazprom, noting that the
vated financial leverage at the end of last year, entire gas futures price curve is moving up and
planning to recommend a 40% payout ratio on that the company's shares are yet to reflect this.™
adjusted net income for 2020, and 50% payout
ratio for 2021.
Gazprom was previously concerned that
financial leverage could exceed 3x on net debt/
Ebitda at the end of 2020, with the actual ratio
coming close to 2.8x and expected to decline to
2x by the end of 2021.
"The CFO's guidance on the dividend payouts
and financial leverage dynamic are fully in line
with our estimates," Sberbank CIB commented.
The analysts forecast that the company will
pay RUB9 dividend per share (making a 4%
yield) for 2020 and raise it to RUB22-RUB24

Week 09 03•March•2021 www. NEWSBASE .com P7