Novatek Applies for Chinese Gas JV

The European Commission (EC) said on March 17 it had received an application from Russian firms Novatek and Gazprombank, as well as China's Sinopec, to form a gas trading joint venture (JV) in China.

According to the EC, "the notified transaction could fall within the scope of the Merger Regulation."

The JV, known as Sinova Natural Gas, will engage in "the import and export, as well as purchase and sale, of natural gas (including pipeline gas and LNG) and investment in natural gas-related projects in China," an EC notice read.

Novatek sells LNG to China from its Yamal LNG project in the Russian Arctic, and is due to ramp up shipments after launching its second export terminal Arctic LNG-2 in 2023. It is looking to make its LNG business more robust by expanding across the supply chain, all the way to end-users, in China and other key Asia-Pacific markets.

The gas producer signed a heads of agreement with Gazprombank and Sinopec on establishing the new JV in June last year. It has also reached preliminary deals with Indian LNG developers H-Energy and Petronet LNG on the joint marketing of LNG in India, as well as an agreement with Japan's Saibu Gas on marketing LNG and developing gas-fired power generation and bunkering operations.