Novatek ready to study LNG contracts on DES terms, consumers to have own fleet

BANGALORE. Feb 6 (Interfax) - Novatek is ready to study contracts for supplying liquefied natural gas under DES terms and conditions, and consumers will have their own fleet, CEO Leonid Mikhelson told reporters in Bangalore on the sidelines of India Energy Week.

"We are considering everything. It's a matter of negotiations. Many consumers already have their own fleet. We are considering various options," Mikhelson said, answering a question about the possibility of concluding contracts on DES (delivered ex ship) terms.

At the same time, he noted that Novatek intends to sell LNG with FOB price quotes (free-on-board) at the transshipment points planned for launch in Murmansk and Kamchatka. Mikhelson stressed that large orders for the use of LNG tankers are currently appearing, and this has become a market, which was not there 5-7 years ago.

LNG transshipment complexes under construction at Kamchatka and the Murmansk Region are designed to ensure efficient LNG transportation from Arctic LNG 2 and other Novatek projects by organizing reloading from Arc7 ice-class LNG tankers to conventional vessels. Each of the terminals includes a floating LNG storage facility with capacity of 360,000 cubic meters, and with two ship-to-ship transshipment points.

Commenting on Novatek's interest in deliveries to Pakistan, Mikhelson said that the company was ready to deliver on a spot basis if the Pakistani side finds a fleet. Pakistan has not approached Novatek regarding long-term contracts, he said.

"Looking at future volumes, it won't be on the spot basis they currently want. We did not have these deliveries in the portfolio, and including it in spot deliveries would require diverting the tanker fleet. If they resolve the issue of the tanker fleet, we will be ready to consider something on spot. So I said that at the end of the year the next line with long-term contracts will be introduced. As far as I know, they really didn't seek contact with us, "he said.