Novatek CEO: Russian companies need to unite and get back lost share of world LNG market

ST. PETERSBURG. June 20 (Interfax) - Leonid Mikhelson, the head of Novatek, Russia's largest LNG producer, called for the unification of the efforts of Russian companies and expressed his readiness to share technologies.

"Other companies that are interested in LNG production in Russia have not yet applied to Novatek . If they do, we will probably share. It is necessary that Russia does not lose its share in the global gas market," he told journalists at SPIEF.

"We are all in this together now: Gazprom , Rosneft , Novatek, and Gazprom Neft . We need to unite and return this share. We must produce not 30 million tonnes of LNG, which we do today; we need to produce at least 150 million tonnes. We must produce all together. Why set up some sort of competition? Russian competition in the world market is nonsense," Mikhelson said.

Novatek currently has three LNG production technology licenses. The first one, Arctic Cascade, with a capacity of 900,000 tonnes per year, is used on the fourth line of the Yamal LNG plant. The second, Arctic Cascade Modified, with a capacity of 3 million tonnes, will operate on Ob LNG, and the third, Arctic Mix, will be used at Murmansk LNG; its capacity will be about 7 million tonnes per year.

Mikhelson also announced his readiness to further promote the granting of incentives for the development of hard-to-recover gas reserves in the Nadym-Pur-Taz region .

"Inventive problem solving Issues for oil are being resolved, and it is necessary to consider the this for gas in the same way. In the Nadym-Pur-Tazovsky region, where we have all the infrastructure we need of course, we need to switch to production from deep deposits with hard-to-recover reserves. We are serious about this and we are discussing the issue. We held a big conference in Tyumen in our scientific and technical center two months ago, where everyone was present: both the ministry and companies. We will raise this issue further," he said.

In Russia, large-tonnage LNG is produced by Sakhalin Energy plants with a capacity of 9.6 million tonnes per year. The co-owners are Gazprom, Mitsui and Mitsubishi, while NOVATEK expects to become a co-owner by purchasing a share of Shell (SPB: RDS.A)), as well as Yamal LNG, owned by Novatek, TotalEnergies , Chinese CNPC and SRF, with a capacity of 17.5 million tonnes per year. Novatek also owns half of the Cryogas-Vysotsk LNG plant with a capacity of about 700,000 tonnes per year.