Page 8 - EurOil Week 12 2023

EurOil PERFORMANCE EurOil

Novatek sees profits double in 2022 on

higher LNG export revenues from Europe

RUSSIA NOVATEK reported a doubling of profits in demand reduction and destruction has led to a
2022, Interfax reported on March 16, thanks to steady decline in gas prices over recent months
Novatek gained from a jump in shipments to the highly-priced Euro- to pre-war levels.
increased LNG sales to pean market, despite fallout from Moscow’s war There is an added risk that Europe might
Europe. in Ukraine, move to curtail Russian LNG imports. Earlier
Even though Russia has significantly cur- this year it was reported that Germany’s govern-
tailed pipeline gas supply to Europe over the past ment was considering steps to limit Russian LNG
year, Russian LNG imports have been robust, purchases. Government officials in Estonia and
and even increased by 31% in 2022 to a record other EU member states have also urged Brussels
19.2 bcm, as Europe’s high prices attracted more to introduce a price cap on Russian LNG, in line
cargoes from the Asian market. with similar measures imposed on the country’s
Revenues at Novatek climbed 10% last year crude oil and petroleum product exports.
to RUB805bn, the company reported, while The European Commission has also urged
net profit doubled to RUB604bn. Driving these EU countries and companies not to enter into
gains was increased turnover from Novatek’s new supply contracts for Russian LNG.
50% stake in the Yamal LNG plant in the Rus- Meanwhile, Novatek insists that its upcom-
sian Arctic. ing second LNG export project Arctic LNG-2
Nearly 15mn tonnes of LNG produced at remains on track for launch in 2023, despite
Yamal LNG went to Europe last year, out of a international sanctions and a number of
total output of 21mn tonnes. Novatek’s overall Western contractors, suppliers, financiers
gas output rose 3% to 82 bcm. In addition to and other companies withdrawing from the
LNG exports, the company also sells gas domes- development.
tically to industrial customers. Under the stated plan, Arctic LNG-2’s first
In contrast, while revenues at Novatek’s larger train will launch in 2023, followed by its second
state-owned peer Gazprom rose by 25% last year in 2024 and its third in 2026, bringing total out-
to nearly RUB8 trillion, its net profit slumped put to around 20mn tonnes per year. Whether
more than 300% to only RUB747bn. Gazprom’s or not Arctic LNG-2 can stay on schedule will be
pipeline gas exports to Europe, Turkey and a key litmus test of whether Russia can success-
China dropped 45% last year to 101 bcm, while fully expand its LNG exports to offset the loss of
its gas production fell 20% to 413 bcm. the European pipeline gas market over the last
Looking ahead, Novatek’s net profits and year. Russia’s energy ministry said this month
revenues are likely to decline in 2023, reflecting that the target was hiking LNG output to 100mn
lower gas prices both in Europe and in Asia. In tonnes per year by the end of the decade, up from
Europe, ample LNG supply, mild weather and around 30mn tonnes per year at present. ™

P8 www. NEWSBASE .com Week 12 22•March•2023