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Russia's Novatek to boost gas resources to keep output, market share steady
April 21, 2017 / 10:04 AM / 8 months ago

Russia's Novatek to boost gas resources to keep output, market share steady

MOSCOW, April 21 (Reuters) - Novatek, Russia’s largest non-state natural gas producer, is seeking to increase its resource base to stabilise gas output and keep its domestic market share steady, Leonid Mikhelson, head of the company, said on Friday.

Mikhelson also said import-export agencies from Germany and Sweden had agreed to help finance the Yamal LNG project, though he declined to disclose details.

Yamal LNG, with total inward investment set at $27 billion, has almost completed fund-raising thanks mainly to investors from China.

Novatek is the main shareholder in Yamal LNG, which is due to start producing liquefied natural gas this year, with a stake of 50.1 percent.

Mikhelson, Russia’s richest businessman according to Forbes magazine, said the company was looking to boost its resources in the Arctic Yamal region, which accounts for around 70 percent of Russian gas resources.

“We are looking into the possibility, apart from the creation of a resource base for Yamal LNG, of creating an additional resource base in the region to increase our production potential,” he told reporters before Novatek’s annual general meeting in Moscow.

“I think by the end of the year we will be able to form that resource base, which will allow us to keep gas production at a steady plateau in the region and keep our share of the domestic market.”

Last year, Mikhelson assessed Novatek’s share of Russian gas production at 9 to 10 percent. He said its share of the domestic supply market, where state-owned Gazprom is a dominant force, was around 20 percent.

In 2016, Novatek’s gas production declined by 2.7 percent to 66.1 billion cubic metres, while output of liquids, or crude oil and gas condensate, jumped by 36.8 percent to 12.4 million tonnes.

France’s Total and China National Petroleum Corp each control 20 percent of Yamal LNG, while China’s Silk Road Fund owns 9.9 percent. (Reporting by Oksana Kobzeva; Writing by Vladimir Soldatkin; Editing by Dale Hudson)

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