BY LYUBOV PRONINA and ANNA SHIRYAEVSKAYA
TARKO-SALE, Russia -- OAO Novatek, the Russian company
developing a liquefied natural gas project in the Arctic, is
considering a tie-up with global energy trader Gunvor Group
as it prepares to ship LNG abroad for the first time.
Novateks trading arm plans to sign joint contracts with
Gunvor to sell cargoes from the Yamal project, CEO Leonid
Mikhelson said in Davos, Switzerland. The Russian gas company
already has customers for as much as 78% of the LNG from the
venture, he said.
Novatek, which gained rights to export LNG in December, is
leading the Yamal project
to help expand
Russias 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 said. Theres a high
probability of arranging such joint contracts, he said.
Seth Pietras, a spokesman for Gunvor, declined to comment on
cooperation with Novatek when contacted by Bloomberg News.
Gunvor co-founder Gennady Timchenko said in June that the
commodity company, with offices in Geneva and Singapore, was
interested in expanding its gas and LNG trading operations
and had potential Asian contracts planned. Billionaire
Timchenko and Mikhelson control Novatek with a combined stake
Novatek has already struck deals to sell LNG from Yamal to
China National Petroleum Corp., a shareholder in the venture,
and Gas Natural SDG SA of Spain. Guaranteed supply contracts
may help the partners obtain project
financing for the
development, which is forecast to cost as much as $26.9
billion to bring to fruition.
While most LNG is sold under long-term contracts, spot and
short-term dealsof four years or lessrose to a
record 25.4% of total trade in 2011 from 16.3% in 2009,
according to the International Group of LNG Importers. That
share retreated to 25% in 2012, the industry group said.
Novatek, based in Tarko-Sale, Siberia, holds a 60% stake in
the Yamal venture after selling 20% to CNPC last year. Total
SA also has 20% and, like CNPC, has agreed to buy cargoes
from the project
. The French company will
ship the LNG to Asia and Europe
, while Novateks
trading arm, Novatek Gas & Power, will buy cargoes to
supply Asia, Mikhelson said.
CNPCs LNG-purchase agreement, for at least 3 million
tpy, will be fully linked to oil prices, while the other
contracts will have mixed pricing, according to the
LNG prices for delivery to Northeast Asia in four to eight
weeks were on average $3.70/MMBtu higher than in southwest Europe
in the past year, according
to assessments by World Gas Intelligence.
Freight to the Chinese market, to Asia, is much more
expensive than to Europe
, but at current prices, at
contracts signed, the Asian market gives bigger
margins, Mikhelson said.
Novatek is ready to reduce its 60% interest in Yamal LNG
further, while keeping a controlling stake, he said. While
its in talks with companies from India
, Japan, South Korea, China
and elsewhere, any decisions are unlikely in the next two to