Page 15 - GLNG Week 10 2023
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       Russian Novatek said to confirm buying



       27.5% in Sakhalin-2





        RUSSIA           RUSSIAN  natural  gas  major  Novatek  has  LNG (liquefied natural gas) and 3.7mn tonnes of
                         informed the government of its readiness to  oil. About 90% of the plant’s LNG is sold under
       Novatek could replace   acquire Shell’s 27.5% stake in the Sakhalin-2 pro-  long-term contracts, mainly to Japan, with spot
       Shell, the original   ject, Kommersant daily reported citing unnamed  shipments going to China, South Korea and
       developer of the project.  sources close to the deal. Leonid Mikhelson, the  Indonesia.
                         head and shareholder of Novatek, said in Sep-  Japan’s Mitsui and Mitsubishi previously
                         tember 2022 that the company would decide on  agreed to the change of jurisdiction and retained
                         buying the stake after a due diligence audit.  stakes in Sakhalin-2. Shell refused to partici-
                           As covered by bne IntelliNews, Novatek is in  pate in the restructuring scheme, writing off the
                         fact the only company that can meet the criteria  $1.6bn book value of its stake.
                         set by the Russian government for participating   Analysts surveyed by Kommersant believe
                         in Sakhalin-2 after Shell pulled out of the project  that Novatek could substantially benefit from
                         amid the fallout from Russia’s full-scale military  buying into Sakhalin-2 as prices in its long-term
                         invasion of Ukraine.                 contract are linked to oil and are significantly
                           Sakhalin-2, a project to develop the Pil-  lower than spot prices for LNG in Asia at the
                         tun-Astokhskoye and Lunskoye fields on the  moment. The company could expand its LNG
                         Sakhalin shelf, has been implemented since  capacity by about 35% as a result of the deal,
                         1994 under a production-sharing agreement  according to previous estimates.
                         (PSA). The main shareholders in the project are   Previously Novatek bought a 49% stake in
                         Gazprom (50%), Japan’s Mitsui (12.5%) and Mit-  its Terneftegaz joint venture with TotalEnergies
                         subishi (10%), with Shell holding the rest.   from its French partner, bringing its ownership
                           In 2022, the plant produced 11.5mn tonnes of  to 100%. ™



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