Russia's Novatek to Supply 3M Tons of LNG per Year to CNPC
MOSCOW, Oct 22 (Reuters) – Russia's No.2 gas producer Novatek said on Tuesday it had concluded an outline agreement to supply three million tonnes per year of liquefied natural gas (LNG) to China National Petroleum Corp (CNPC) from its Yamal LNG project.
The deal is crucial for Novatek and is in line with Russian government requirements on securing supply contracts for LNG projects as a precondition for opening up exports of the tanker-shipped fuel.
The government is working on amendments to liberalise LNG exports – now the preserve state-owned Gazprom – from the start of next year. The necessary changes to a 2006 law on gas exports have still to go before parliament.
Russia, the world's top producer of conventional gas, has been developing closer ties with China, the leader in energy consumption.
"From our side, we welcome the achievement of a mutually beneficial agreement on LNG supplies to the fast growing Chinese market," Novatek's Chief Executive Officer Leonid Mikhelson said in a statement.
The deal covers a period of 15 years, with pricing linked to the so-called Japanese crude cocktail – a benchmark based on oil prices.
Yamal LNG, being developed by Novatek, Total and China's CNPC, is scheduled to start producing LNG in 2016 with a view to supplying 16.5 million tonnes of the tanker-shipped fuel by 2018.
(Reporting by Vladimir Soldatkin; Editing by Douglas Busvine)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Total Starts Up Antwerp Refinery And Petrochem Complex After Upgrade (Nov 30)
- Hoegh LNG: Pakistan LNG Import Project Consortium Folds (Nov 16)
- France's Total Buys Engie's LNG Business For $1.5B (Nov 08)
Company: CNPC more info
- Petrobras CEO Says To Discuss Refining Partnership With CNPC CEO (Nov 15)
- CNPC Plans to Cut Gas Supplies to Industrial Users-State Media (Nov 06)
- China's CNPC Starts Third Natural Gas Pipeline To Shanghai (Oct 13)
Company: Novatek more info
- Report: US May Get First LNG Import From Russia Despite Sanctions (Jan 09)
- RIA: Moscow, Riyadh Agree To Explore Aramco Taking Part In Novatek Project (Nov 13)
- Russia's Novatek Says Yamal LNG Seen Expanding By 1 Million Tonnes (Oct 17)