Novatek Bets on LNG and Liquids in Next Decade

Novatek bets on LNG and liquids production, CEO Leonid Mikhelson said in Davos. Being excluded from the export pipelines business, Russia’s largest independent natural gas producer can profit from the LNG export liberalization entered into force in January.

“LNG demand is increasing faster than the gas market in general. A competition between fuels is under way. In the past few years, gas has been losing this competition, but I think in the future the share of gas in the total energy balance will increase,” Mikhelson commented.

After more than doubling its share of the domestic gas market in the past seven years, the company also wants to take advantage of the gas condensate market. He sees a 40-50% rise in production in the next year over new field coming on stream.

At the same time, the co-owner of Novatek said that Russia is climbing the ranks of LNG exporters. He also said that Novatek would not compete with Gazprom and Rosneft, as the increase in global demand could absorb the production. Asian markets would play a central part in this process, Mikhelson said on Monday.

Novatek reported an 8.5% yearly increase in natural gas production in 2013, and a simultaneous 11.4% increase in combined liquids production.