Page 9 - FSUOGM Week 47 2021

FSUOGM INVESTMENT FSUOGM

Yamal LNG to start issuing

dividends this year

RUSSIA THE Novatek-led Yamal LNG terminal is “However, this would be the first returns
expected to pay its first ever dividend for the first earned by the company on the equity invest-
Yamal LNG was nine months of this year, representing an impor- ments made over the years by Novatek in the
brought on stream tant milestone for shareholders in the $27bn $27bn project,” BCS GM said.
under two years ago. project. Moving forward, the project is expected to
Yamal LNG was brought online in Decem- use half of available cash flow for loan repay-
ber 2019 and reached its three-train liquefac- ments and half for dividends, Interfax reported.
tion capacity of nearly 17mn tonnes per year The anticipated start of dividends comes
(tpy) in late 2018. But its shareholders, which amid an unprecedented surge in global LNG
also includes France’s TotalEnergies and China’s prices, as demand has rebounded following
CNPC and Silk Road Fund, are yet to reap any the pandemic while supply has remained con-
rewards from the accelerated development. strained. But Yamal LNG’s gain from the market
A meeting of shareholders will take place situation was relatively modest, as the majority
on December 10 to discuss whether dividends of its sales take place under oil-indexed con-
should be issued, Interfax reported last week. tracts. What increase there was came as a result
Analysts at BCS Global Markets (BCS GM) of recovering oil rather than gas prices.
noted that the RUB16bn ($210mn) that Novatek Novatek is currently seeking external financ-
would earn in dividends for the first nine months ing for its next liquefaction project, Arctic LNG-
of the year would not be the first time it has 2. That project is expected to benefit from higher
received money from the project. Yamal LNG margins than Yamal LNG, as it is larger in scale
paid out some RUB113.5bn to the company in and will make use of existing infrastructure
principal and interest on loans. developed for the latter project. ™

PERFORMANCE

European gas prices see further growth

EUROPE WHOLESALE gas prices in Europe rose for the much gas-to-coal switching takes place on the
seventh day in a row on November 18, as a mul- market.
Germany's regulator has titude of factors have made the market tighter. Nord Stream 2’s certification will no longer
halted the certification The December gas delivery contract rose be complete until April next year at the earliest,
of Nord Stream 2. from €70.1 per MWh on November 10 to €75.7/ and it could well drag on into the late summer,
MWh on November 12 and then €79.95/MWh depending on how long the European Commis-
on November 15. It then soared to €94.2/MWh sion takes to make its recommendation to Ger-
on November 16, and was trading at €95.4/MWh many’s regulator.
as of 16:20 GMT on November 18. “Delays in utilising Nord Stream 2 may
The sharp growth in recent days came after have a lasting effect through the region’s 2021
Germany’s energy regulator announced it had winter and beyond,” analysts at Rystad Energy
halted the certification process for the Nord warned in a note on November 17. “Europe may
Stream 2 pipeline. It has said it will only resume be forced to continue being dependent on an
the process once the pipeline’s Swiss-based oper- already tight liquefied natural gas [LNG] mar-
ator has established a German subsidiary. ket, which suggests an increased likelihood of a
The regulator’s announcement dashed expec- sustained high price environment throughout
tations of any supply relief through the pipeline much of next year’s first half if Europe emerges
arriving in Europe this winter. It follows a drop with severely depleted storage.”
in temperatures in the northern hemisphere, Russian flows to Europe through Ukraine
and data on November 17 showed that gas stor- and Poland have increased only marginally
age levels in Europe were 2.5% lower than in recently, despite Gazprom’s announcement that
the previous week. Another bullish factor has it would be sending gas for storage in Europe ear-
been higher carbon prices, which may limit how lier this month. ™

Week 47 24•November•2021 www. NEWSBASE .com P9