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2013 October 22   14:22

Yamal LNG and CNPC sign Heads of Agreement for LNG supplies

OAO NOVATEK (“NOVATEK”) announced the conclusion of Heads of Agreement for the supply of liquefied natural gas (LNG) between Yamal LNG and China National Petroleum Corporation (“CNPC”). The document provides for the supply of no less than three (3) million tons of LNG per annum at delivered ex-ship (DES) terms for a period of 15 years with possible supply extension, with the LNG price is indexed to the Japanese Crude Cocktail.

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 31 December 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).

Yamal LNG is a joint venture currently owned by OAO NOVATEK (80%) and Total S.A. (20%). On 5 September 2013 NOVATEK and CNPC concluded an agreement on purchase of a 20% equity share in Yamal LNG by CNPC. The transfer of title to the equity share is subject to receipt of necessary regulatory approvals and expected to be completed by 01 December 2013. Following completion of the deal, the shareholder structure of Yamal LNG will be as follows: OAO NOVATEK (60%), Total S.A. (20%) and CNPC (20%). 

CNPC is the largest oil and gas company in China and one of the world’s largest suppliers of services in oil and gas sector. The company operates in 70 countries worldwide.

Related links:

NOVATEK sells 20% stake in Yamal LNG to China's CNPC>>>> 

Frightening Sabetta>>>>

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