Total strikes deal on Yamal LNG
French oil major Total signs agreement with Novatek on the development of the Yamal LNG project, thus becoming the by far biggest foreign investor in the Russian Arctic.
The deal signed in Moscow on Wednesday will make Total the main international partner in the Yamal LNG project with a 20 percent share. License holder Novatek will keep a 51 percent interest in the project. In addition, Total will acquire a 12.08 percent shareholding in Novatek, a stake which will be increased to 15 percent within 12 months and to 19.40 percent within 36 months, a press release from the company informs.
The agreement was signed by Total’s Christophe de Margerie and Novatek’s Leonid Mikhelson and in the presence of Russian Prime Minister Vladimir Putin.
-This is a good deal, with great perspectives, Putin highlighted, the government’s press service reports.
Total has long expressed interest in the Yamal LNG project. The company has extensive experiences in LNG development and has from before major strategic interests in the Russian Arctic. The company owns 40 percent of the Kharyaga project in the Nenets Autonomous Okrug and is partner with Gazprom and Statoil in the Shtokman project in the Barents Sea. With its cooperation with Novatek in Yamal, Total will further strengthen its role in the region.
Yamal has over the last years been a top priority for the Russian oil and gas industry. Gazprom is investing heavily in the Bovanenkovo field, and has plans for the development of several other giant fields in the region. Gazprom also has a stake in Novatek’s Yamal LNG project.
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The Yamal LNG project is based on gas from the South Tambey gas field, a deposit owned by Novatek (80%) and Gazprom (20%). The field contains an estimated 1,25 trillion cubic meters of gas and is located in the northern part of the Arctic peninsula. The new plant will open up for increased shipping along the Northern Sea Route.
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Company representatives have earlier said that the project will start production in 2018. Commenting on the deal, Total’s Chairman and Chief Executive Officer Christophe de Margerie says his company is “delighted with this strategic alliance with Novatek, which will accelerate the Group’s development in Russia”.- This agreement adds to the close cooperation built with Gazprom since 2007 on the Shtokman project, he adds.
According to RIA Novosti, he confident that the engagement in the Yamal LNG will not affect progress plans in the Shtokman project.
