Novatek brings CNPC into Yamal LNG, signs long-term supply deal for China
ST. PETERSBURG. June 21 (Interfax) - Novatek and China National Petroleum Corporation (CNPC) signed an agreement on cooperation in the framework of the Yamal LNG project during the economic forum in St Petersburg on June 21, an Interfax correspondent reported from the scene.
The agreement calls for CNPC to buy a 20% stake in the Yamal LNG project and for Novatek to sign a long-term liquefied gas supply deal with China. It was signed by Novatek CEO Leonid Mikhelson and CNPC board of directors chairman Zhou Jiping.
According to Novatek, the sale of a stake in Yamal LNG is planned for finalization October 1. The long-term LNG delivery contract involves not less than three million tonnes per year.
The agreements reached include active work by CNPC to attract outside financing for the project from Chinese financial institutions.
"The signing of this agreement is an exceedingly important step in the realization of the Yamal LNG project. In the company CNPC we gain not only a reliable partner with the richest experience of involvement in international LNG projects, but also a reliable long-term customer representing one of the most intensively developing gas markets in the world. We are also counting on a significant contribution by CNPC in the attracting of outside financing," a Novatek statement quotes Mikhelson as saying.
Novatek now has 80% in the project and France's Total the other 20%. Mikhelson has said he thinks it would be best to increase the number of Yamal LNG stockholders to four.
One of Novatek's leading shareholders, Gennady Timchenko, said in an interview with the Rossiya 24 television network that CNPC intends to finance a significant part of Yamal LNG. He also said that Russia might liberalize the exporting of LNG if Yamal LNG concludes firm delivery contracts with China.
Novatek's shares soared 3.3% on the Moscow Exchange to 336.85 rubles a share, their highest since February 11, immediately following this news.