Russia Offers Up Gydan Discovery

Russia plans to auction off rights to a Soviet-era gas discovery on the Gydan Peninsula, with private gas producer Novatek lined up to secure the project.

A contest will take place by the end of this year inviting subsoil users to bid for a licence for the Soletsko-Khanavey gas field, according to a decree signed by Russia's prime minister Dmitry Medvedev and seen by Russia’s RBC news outlet. The minimum price for offers has been set at rubles 2.4bn ($38mn).

Soletsko-Khanavey was discovered in 1985, and based on Soviet research, holds 154.7bn m³ of gas in confirmed reserves and up to 1.8tn m³ of resources in-place.

Russia’s oil and gas majors have competed fiercely in recent years for rights to Arctic acreage, as they look to replenish their declining reserves. However, the licence terms for Soletsko-Khanavey state that the field’s gas must be liquefied and exported, effectively limiting involvement to Novatek and its subsidiaries.

Novatek is the only LNG producer working in the Russian Arctic, with acreage on both the Yamal and the Gydan peninsulas. It aims to ramp up its annual production to 70mn metric tons by 2030, up from around 16.5-17mn mt/yr present, all from its Yamal LNG project.