Gazprom and Novatek to Cooperate on Yamal LNG

Two of Russia's largest gas explorers and producers, Gazprom and Novatek, are set to increase LNG production from the Yamal peninsula following the signing of a Memorandum of Cooperation (MoC).

Through the deal, the companies will consider the creation of a joint venture to increase liquefied natural gas production on the peninsula. If this venture is established, Gazprom will take a 75 per cent stake, with Novatek taking the other 25 per cent stake.

The joint venture will seek to exploit the resources of and develop the Tambey fields on the Yamal peninsula, fields currently owned by Gazprom. These fields are the Severo-Tambeyskoye, Zapadno-Tambeyskoye and Tasiyskoe fields.

If developed, Gazprom estimates that these fields could produce up to 20 billion tonnes of LNG every year, from estimated reserves of 1.56 trillion cubic metres.

Under the MoC, Novatek and Gazprom will also establish a joint venture for the development of the Gydan peninsula, which is based on Novatek's Utrenneye (Salmanovskoye) field. Through this venture, the companies would even split their stakes, with 50 per cent interest to each.

Novatek and Gazprom say they "will seek to develop and approve an integral development program for the fields they own on the Gydan Peninsula."

Gas reserves on this field are estimated at 767.1 billion cubic metres.