By ANNA SHIRYAEVSKAYA & STEPAN KRAVCHENKO
Novatek will supply fuel in its liquefied form to China National Petroleum Corp. for 15 years, according to a preliminary accord.
Novatek will sell at least 3 MMmtpy of liquefied natural gas to CNPC on delivered ex-ship terms, with the price indexed to the Japanese Crude Cocktail, the Tarko-Sale, Novatek said in a statement. The agreement was signed during Prime Minister Dmitry Medvedevs visit to Beijing. The period of supplies can be extended, according to the statement.
Novatek, which is leading the $20 billion LNG project in the Russian Arctic region, is challenging Gazproms monopoly on supplies of super-chilled fuel abroad to benefit from the Asian nations rising energy demand. Russia plans to allow Novatek, as well as oil producer Rosneft, to export LNG from next year.
CNPC agreed in June to buy a 20 % stake in the Yamal LNG project, joining Novatek and partner Total. The deal is expected to be completed by December 1.
Yamal LNG at full capacity will produce 16.5 MMtpy of LNG starting from the end of 2016, according to Novatek.