Bloomberg News

Novatek Gains Control of Yamal LNG Amid Search for Partners

September 30, 2011

(Updates with future partners from third paragraph.)

Sept. 30 (Bloomberg) -- OAO Novatek, Russia’s second- biggest natural-gas producer, raised its stake in the Yamal LNG project to 100 percent, as it prepares to invite foreign companies into the Arctic venture.

Novatek exercised options it bought earlier this year and will make the remaining payments for the 23.9 percent and 25.1 percent stakes by June 30, 2012, the company said today in a statement, without elaborating.

The gas producer plans to offer shares to future partners in the project to produce liquefied natural gas, while retaining the 51 percent it had previously. Yamal LNG may need as much as $20 billion in investments, not including spending on a tanker fleet to ship the fuel from the icebound waters. The project may be the world’s most complex undertaking of its kind, Evgeny Ambrosov, senior executive vice president of state shipper OAO Sovcomflot, said this week.

The Tarko-Sale, Siberia based producer agreed to buy its 51 percent stake for $650 million in 2009. In July 2009, it paid $10 million for an option to buy the 23.9 percent stake for $450 million. This year in March, it paid $15 million for a call option to buy the 25.1 percent stake for $526 million.

Total SA in March agreed to purchase a 20 percent stake in the Arctic project to produce LNG, in a deal that hasn’t yet closed. The French producer agreed at the same time to buy 12 percent of Novatek for about $4 billion and completed the deal in April.

After making Total a strategic partner, Novatek is seeking to invite more companies, holding talks with a range of producers, including from Qatar and India, CEO Leonid Mikhelson said in June.

Total expects Qatar to be a good partner for Yamal LNG, as it could provide swaps while the Russian project is shut in ice, Christophe de Margerie, CEO of the Paris-based producer, said on Sept. 16.

--Editors: Torrey Clark, Stephen Cunningham

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at

To contact the editor responsible for this story: Will Kennedy at

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