China National Petroleum to acquire 20% stake in NOVATEK’ Yamal LNG

OAO NOVATEK and China National Petroleum Corp. (CNPC) have concluded a framework agreement on cooperation within the Yamal LNG project.

The agreement provides for: acquisition by CNPC of a 20% stake in the project; conclusion of a long-term contract for supply of at least 3 million tons of LNG per annum; and active assistance in organizing the provision of external financing for the project from the Chinese financial institutions.

The acquisition of a 20% stake in the project by CNPC is estimated to be closed by October 1, 2013.

“We are glad to conclude this agreement with NOVATEK on our entrance into the Yamal LNG project based on vast conventional gas reserves, guaranteeing long-term sustainable supplies of LNG to China. We acknowledge that Russia is giving a lot of attention to its expansion into the international LNG markets and we welcome the increase in Russian LNG supplies to China,” CNPC Chairman Zhou Jiping stated.

Yamal LNG project envisages the construction of an LNG plant with annual capacity of 16.5 million tons per annum based on the feedstock resources of the South-Tambeyskoye field.

According to the PRMS reserve standards, the proven and probable reserves of the South-Tambeyskoye field as of December 31, 2012, were appraised at 907 billion cubic meters of natural gas. The project also requires the construction of transport infrastructure including a sea-port and an airport located at Sabetta (north-east of the Yamal Peninsula).

Currently NOVATEK owns 80% stake while Total owns 20% stake in Yamal LNG.