Novatek Formalizes Yamal LNG Partnership with Total

Novatek and Total SA have signed a definitive agreement to jointly develop gas reserves on the Yamal peninsula, a large parcel of land jutting out into the Kara Sea above the Arctic Circle, in west Siberia.

The project is to be carried out at South Tambei gas and gas condensate field located in the north of Siberia, home to around 40 trillion cubic metres of gas, which exceeds the stocks of any country.

Under the terms of the  deal signed in Paris, Total will take a 20 per cent stake in Yamal LNG, which will target exports to Europe and Asia.

Novatek is seeking to add additional partners, but intends to keep a minimum 51 percent interest in the project. GDF Suez, Shell, Exxon, ConocoPhillips, Mitsui, Mitsubishi,  Repsol and Qatar Petroleum, have been mentioned as possible future participants.

“We will work with Novatek to unlock the Yamal peninsula gas potential using world-class technology and combining the expertise of both companies as we build a liquefied natural gas plant in the area,” said Yves-Louis Darricarrere, the president of Total Exploration and Production.

The agreement is the result of a strategic alliance created earlier in 2011 that saw Total invest $4 billion to acquire a 12 per cent stake in Russia largest independent gas producer.