Novatek to Pre-Sell Half of Yamal Gas

Novatek is planning pre-sales of up to half of the LNG available from the Yamal project, Reuters has reported. The pre-sales contracts are planned to be signed once a final investment decision (FID) is made.

Chief executive of Novatek, Leonid Mikhelson, told Reuters that the company would aim to complete the pre-sale contracts by the end of next year in order to finance the Yamal project further. An FID on the project is due to be signed by the end of this year.

"After we take a final investment decision and before we begin project financing, we plan to sign contracts with consumers and will contract out about 50 percent of the Yamal LNG project (gas)," he said. "Signing contracts will open up project financing for us."

Novatek holds an 80 per cent stake in the Yamal LNG project, while French major Total holds the remaining 20 per cent stake.

However, Novatek is now seeking to take on two or three partners in the project, with a maximum 29 per cent stake up for grabs. The company said it will seek to retain at least a 51 per cent stake in the project.