Page 111 - RusRPTFeb19

9.2 Major corporate news 9.2.1 Oil & gas corporate news
• Gazprom
Russia’s leading independent gas producer Novatek is in talks with the state-owned gas giant Gazprom on a possible swap of gas deposits, Vedomosti reported on January 23. Novatek will give up the Little Yamal fields in the Yamalo-Nenets Autonomous District in exchange for undeveloped deposits near its other assets, the Novatek Board of Directors, Leonid Michelson told reporters on the sidelines of the World Economic Forum in Davos. “Malo-Yamalskoye in the geological sense is almost completely prepared field. We carried out significant geological exploration. There is a development project with a production volume of 4–5bn cubic meters. But there is a complete absence of any infrastructure there and so it is not profitable as an investment project,” he noted. “And since Gazprom Neft has a number of Novoportovskoye fields nearby, the combination of these two fields will become worthwhile, so economic expediency appears. We are considering the exchange of this field and transferring it to Gazprom Neft,” said Mikhelson. Novatek, in its turn, is interested in the fields that are not currently being developed, which are distant from the Arctic Gas infrastructure, but are located near the objects recently acquired by the company, said Mikhelson. “We will get a great synergistic effect,” he explained. According to him, the transaction will be non-monetary, the company will simply swap deposits similar in reserves.
Gazprom has signed a memorandum of understanding with Japanese Itochu on the Baltic LNG project, Kommersant reports. According to Cederic Cremers, country chair Russia at Shell, the planned capacity of Baltic LNG was increased to 13mnt, and production might start in the mid-2020s. Gazprom signed similar MoUs with Shell and Japanese Mitsui & Co on Baltic LNG back in 2016 and September this year, respectively. Given that the project is still at the pre-FEED concept stage, we believe that it might potentially be commissioned close to the middle of the next decade, if a final investment decision is taken. We estimate that the project might cost around $13bn. Overall, given the non-binding nature of the agreement, we do not expect any market reaction to the news.
Gazprom has signed with the Deputy Prime Minister of Armenia, Mher Grigoryan, a supplementary agreement to the gas supply contract with Gazprom Armenia (a 100% owned Gazprom subsidiary) to raise the gas price on the border with Georgia 10% to USD 165/kcm from 2019, Kommersant reports. Domestic gas prices in Armenia are fixed at USD 290/kcm, while the new price of USD 165/kcm only affects the price at which Gazprom’s subsidiary Gazprom Armenia buys gas from Gazprom. Therefore, we do not see any effect on the company’s consolidated financials and deem the news to be not market-moving. In 2013, Gazprom signed a contract with Gazprom Armenia to supply up to 2.5bcm of gas per year in 2014-18.
Gazprom Export announced the start through the electronic trading platform of gas sales (ETP) with the point of putting on the gas hub TTF in the Netherlands. The first trading session with delivery for February was scheduled for Tuesday, January 15, follows from the materials of the company. The results of the auction "Gazprom" did not disclose.
111 RUSSIA Country Report February 2019 www.intellinews.com