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Novatek will start supplies from Yamal LNG project under big contracts from April 2018

December 11, 2017/ 07:35

Sabetta. Russian independent gas producer Novatek will start deliveries of liquefied natural gas (LNG) from the Yamal LNG plant under major contracts on April 1, 2018, Leonid Mikhelson, head of the company, told reporters.

"We said earlier that 96% (of LNG volume gas produced at the plant) has been contracted. The supplies will begin next April. Everything which is produced before that are early deliveries that will bring additional revenues, "he said.

The first loading of the tanker with liquefied gas from the Yamal LNG plant took place on December 8. According to Michelson, the first batch of LNG will be sent to the countries of the Asia-Pacific region, most likely to China. Novatek Gas & Power (a trading subsidiary of Novatek) acts as the buyer. Early deliveries of LNG will be made as spot transactions and deliveries under long-term contracts will begin in the second quarter of 2018.

Mikhelson also said that Japan may buy about 40% of all liquefied natural gas produced at the Yamal LNG plant.
"We do not have direct long-term contracts with Japanese buyers, but I would not be surprised if 40% go to the Japanese market. Japanese buyers are the most qualified, as the largest market. "If (Japan) buys gas from our portfolio clients, I will not be surprised," he said.

Mikhelson also welcomed the participation of France’s Total (owns 18.9% of Novatek and 20% in its Yamal LNG project) in construction of the second plant for the production of liquefied natural gas (the Arctic LNG-2 project).

"Simply, they are wonderful partners. Total studied this project, it is a shareholder of Novatek," Mikhelson told reporters.

The shareholders of Yamal LNG are: Novatek (50.1%), Total (20%), CNPC (20%) and the Silk Road Fund (9.9%). Yamal LNG will become Novatek’s first LNG plant. The project is being implemented on the Yamal peninsula in Russia Arctic region. It envisages the launch of three trains, each with the capacity of 5.5 mln tonnes a year. Now the first train has been launched. The second and the third one will be put into operation in 2018-2019.

Novatek has one more LNG project - Arctic LNG-2. It will be implemented on the Gydan Peninsula. Its capacity will be 18 million tonnes of LNG per year (three trains each with the capacity of 6 million tonnes per year), TASS reports.

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