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Eastern Europe
August 24, 2018 www.intellinews.com I Page 17
Russian LNG runner-up Novatek plans to build new sea terminal
bne IntelliNews
Russia's second-largest natural gas producer with an ambitious LNG strategy Novatek plans to build a transshipment sea terminal in Ura Bay, Murmansk with annual capacity of 20mn metric tonnes, Vedomosti daily reported on August 20 cit- ing the head of the company Leonid Mikhelson.
Ambitious LNG output plans had Novatek
busy looking for shipment solutions. In May Novatek established MAT, its own transportation subsidiary, (Morskoy Arktichesky Transport, or Sea Arctic Transport in English), to manage it’s fleet of tankers and icebreakers delivering LNG from its major projects.
In June Novatek was already searching for more tankers to transport LNG, as its production vol- umes increased, and in August the company reportedly asked ship-owner Teekay to deliver a second Arc7 tanker earlier than previously planned.
The new terminal in Murmansk, located on the export route to Europe, should help to reduce transport costs by boosting the efficiency of the transportation process, Aton Equity commented on August 21, while noting that the capital spend- ing for the terminal is yet to be determined.
Aton reminds that capex for a similar capacity transshipment terminal in Kamchatka is estimated at RUB108bn ($1.6bn), with 35% to be financed
Russia Novatek plans to build a transshipment sea terminal in Ura Bay, Murmansk
from the federal budget. The analysts believe the Murmansk project should help Novatek to cut LNG transportation costs, as well as to reduce the num- ber of expensive Arc-class LNG tankers needed.
"Planned transshipment terminals in Kamchatka and Murmansk might help Yamal LNG save on transportation costs in the Asian direction and optimise shipments to Europe," VTB Capital com- mented on August 21.
The $1.6bn capex number for the Kamchatka terminal is somewhat above $1bn–1.5bn guided by the company previously, VTB notes, also argu- ing that Novatek is likely to use a similar scheme of state-supported financing for Murmansk ter- minal. Overall, VTB views the company’s focus on cost optimisation as positive.
Novatek launched its first major LNG project Yamal in 2017 despite Western sanctions against its shareholder and influential Kremlin insider and stoligarch Gennady Timchenko.
The company has also adopted an ambitious strategy for LNG growth through 2030 and is plan- ning a second LNG plant, Arctic-2. Novatek has already agreed to sell a 10% equity share in the project to France's Total for $2.55bn (giving it a valuation of $25.5bn) and is reportedly in talks to bring South Korea's Kogas on board.