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Novatek prepares to ship LNG to global markets

LNG Industry,

OAO Novatek is considering cooperating with global energy trader Gunvor Group, as the company prepares to ship liquefied natural gas (LNG) to global markets for the first time.

Novatek’s trading branch plans to sign joint contracts with Gunvor to sell cargoes from the Yamal LNG project, according to CEO Leonid Mikhelson. The Russian gas company already has customers for up to 78% of LNG produced from the project.

Global LNG market
The company gained rights to export LNG in December 2013, and is currently leading the Yamal project to help expand Russia’s share of the global LNG market as Asian consumption rises. For Gunvor, the partnership would enlarge its gas-trading operations at a time when efforts among countries to cut oil use and scale back nuclear power are increasing demand for an alternative fuel.

“Gunvor managed to put together a good, professional LNG team,” Mikhelson explained, adding that there was a high probability of arranging such joint contracts. Gunvor has not yet commented on the potential cooperation with Novatek.

Novatek has already signed deals to sell LNG from Yamal to China National Petroleum Corp and Gas Natural SDG SA (GAS) of Spain. Guaranteed supply contracts may help the partners obtain project financing for the development, which is projected to cost as much as US$ 26.9 billion.

Novatek, based in Siberia, holds a 60% stake in the Yamal venture after selling 20% to CNPC last year. Total SA holds the remaining 20% stake and has also agreed to buy LNG produced at the Yamal terminal.

Edited from various sources by Katie Woodward

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