ST. PETERSBURG, Russia, June 21, 2013 /PRNewswire/ --Today at the St. Petersburg International Economic Forum OAO NOVATEK ("NOVATEK" and/or the "Company") and China National Petroleum Corporation ("CNPC") concluded a framework agreement on cooperation within the Yamal LNG project (the "Project). The agreement provides for:
- acquisition by CNPC of a 20% stake in the Project;
-conclusion of a long-term contract for supply of at least 3 million tons of LNG per annum; and
-active assistance in organizing the provision of external financing for the Project from the Chinese financial institutions.
The acquisition of a 20% stake in the Project by CNPC is estimated to be closed by 1 October 2013.
Chairman of the Board of Directors of CNPC Zhou Jiping stated: "We are glad to conclude this agreement with NOVATEK on our entrance into the Yamal LNG project based on vast conventional gas reserves, guaranteeing long-term sustainable supplies of LNG to China. We acknowledge that Russia is giving a lot of attention to its expansion into the international LNG markets and we welcome the increase in Russian LNG supplies to China."
According to NOVATEK's Chairman of the Management Board, Leonid V. Mikhelson, "This agreement is a very important step in the implementation of the Yamal LNG project. We see CNPC as a reliable partner with considerable experience in international LNG projects, as well as a long-term buyer of LNG representing one of the fastest growing gas markets in the world. We are also looking forward to CNPC's significant contribution into attracting external financing for the Project."
Yamal LNG project envisages the construction of an LNG plant with annual capacity of 16.5 million tons per annum based on the feedstock resources of the South-Tambeyskoye field. According to the PRMS reserve standards, the proven and probable reserves of the South-Tambeyskoye field as of 31 December 2012 were appraised at 907 billion cubic meters of natural gas. The Project also requires the construction of transport infrastructure including a sea-port and an airport located at Sabetta (north-east of the Yamal Peninsula).
Yamal LNG is currently owned by NOVATEK (80%) and Total (20%).
OAO NOVATEK is Russia's largest independent gas producer and the second-largest natural gas producer in Russia. Founded in 1994, NOVATEK is engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons. Its upstream activities are concentrated in the prolific Yamal-Nenets Autonomous Region, which is the world's largest natural gas producing area and accounts for approximately 90% of Russia's natural gas production and approximately 17% of the world's gas production. NOVATEK is an open joint stock company established under the laws of the Russian Federation. NOVATEK's shares and GDRs are listed on MICEX-RTS Stock Exchange in Russia and the London Stock Exchange (LSE), respectively, under the ticker symbol "NVTK".
CNPC is China's largest oil and gas producer and supplier, as well as one of the world's major oilfield service providers and a globally reputed contractor in engineering construction. CNPC has presence in almost 70 countries.
SOURCE OAO NOVATEK