18 Nov 2010 13:02

NOVATEK, Fortum to cooperate in energy projects

MOSCOW. Nov 18 (Interfax) - Russian independent gas producer NOVATEK and Finnish Fortum have agreed to cooperate on projects to increase energy efficiency, NOVATEK said in a press release.

NOVATEK CEO Leonid Mikhelson and Fortum President and CEO Tapio Kuula signed the memorandum of understanding, which covers "development of new gas fired electrical and thermal power generation capacities by Fortum Corporation; sustainable resource supplies to Fortum's electrical and thermal power generation facilities on a long-term basis; and joint participation in investment projects within the Russian Federation to improve regional energy efficiency," the press release says.

Fortum's Russian affiliate, OJSC Fortum , may in future get more of its gas from NOVATEK.

NOVATEK is prepared to supply Fortum's entire gas need, the head of OJSC Fortum, Alexander Chuvaev, said this week at a meeting with Chelyabinsk Governor Mikhail Yurevich. However, a decision on that score must await the outcome of talks with Gazprom , the main supplier of gas in the region.

Fortum's contract with Gazprom expires at the end of 2012, Chuvaev said.

"Cooperation with NOVATEK is economically more advantageous for us," he said at the meeting.

Yurevich said Fortum saved 10% by purchasing gas from NOVATEK.

"We have worked with NOVATEK in the past. Some of our power stations in Chelyabinsk region already burn gas. For us it is a better solution," Chuvaev said, noting that NOVATEK supplies about 40% of the gas consumed by its power plants in the region.

OJSC Fortum, formerly TGK-10, includes the Tyumen-1 and -2, Chelyabinsk-1, -2 and -3, Tobolsk and Argayash combined heat and power plants and the Chelyabinsk district power plant. Installed capacity totals 2,700 megawatts. Finnish Fortum owns 93.4% of shares.