Page 110 - RusRPTMay19

Novatek welcomes the inclusion of Chinese partners, as China is one of the main sales markets of the company’s LNG, the head and one of the main shareholders of Novatek Leonid Mikhelson commented. Apart from reported negotiations for 30% stake sale with Saudi Aramco, companies from Japan and South Korea were also interested in acquiring a share in the plant.
Russia's second-largest gas producer private Novatek could form a joint venture with Gazprom Neft, an oil arm of Russian state gas giant Gazprom, which would own extraction licences on the shelf of Kara Sea at the Yamal peninsula, Kommersant daily reported on April 4 citing unnamed sources. Should the joint venture materialise, it would make a major policy shift in favour of Novatek, as only state-controlled Rosneft and Novatek are currently allowed to own extraction licences for strategic sea shelf hydrocarbon fields. The joint venture could take control of Belooostrovsky, Skuratovsky, and Nyarmejsky areas of the Kara Sea, holding about 3.4 trillion cubic meters of gas and 183mn tonnes of oil. Reportedly Gazprom Neft could receive 51% in the joint venture for providing the licences, while Novatek would chip in cash. The two companies have already cooperated on the mainland projects such as Arcticgas and Nortgas, Kommersant reminds. Should Novatek indeed be allowed to extract gas on the shelf, it would make a second recent policy favour for the company, indicating that the fast-growing LNG leader could be becoming Kremlin's new favourite.
French energy major Total continues its integration with Russia’s leading privately owned gas major Novatek, and is planning to acquire a 10% stake in the Kamchatka and Murmansk LNG transshipment hubs that Novatek is currently constructing, Total CEO Patrick Pouyanne was quoted as saying by Kommersant daily. Last month Novatek closed the sale of 10% in its second LNG project Arctic LNG-2 to Total for $2.5bn. Apart from acquiring a 10% stake in Novatek's new project Arctic-2 to be closed by the end of 2Q19, in 2018 Total upped its stake in Novatek overall to 19.4%. “We believe that Total was generally expected to participate in the re-loading hubs, but the development is nonetheless positive for sentiment and provides additional reassurance for potential Arctic LNG-2 partners across the LNG chain,” BCS Global Markets commented on April 19. BCS GM believes that even though Novatek has the capacity to finance the hubs singlehandedly, Total's stake purchase will also reduce the financing burden for Novatek, with the estimated value of the Kamchatka hub project at about $1.0bn. As reported by bne IntelliNews, the two hubs, each with a capacity of over 20mn tonnes, are aimed at lowering transportation costs by allowing the transshipment of LNG from expensive Arctic-class tankers to conventional LNG vessels heading East and West of the Arctic. The launch for both hubs is planned for 2022-23.
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The famous cash pile of leading Russian privately owned oil company Surgutneftegaz (Surgut) has grown so big that it is now almost as large as Russia’s sovereign wealth fund. Surgut reported its Russian Accounted Standards (RAS) results for 2018, under which the company's notorious cash pile increased by 32% in 2018 to RUB3 trillion ($45bn) – a new record for the company and the most it has had in reserve since 2013. The size of the company’s cash reserves are now only RUB900bn less than the entire country's National Welfare Fund (NWF) which stood at RUB3.9 trillion ($58.5bn) as of March 1 2019.
Russia's second-largest oil company independent Lukoil could acquire
110 RUSSIA Country Report May 2019 www.intellinews.com