Rus­sia of­fers In­dian firms stake in Ya­mal LNG project

THE OF­FER OF STAKE IN JSC YA­MAL LNG WAS MADE WHEN OIL MIN­IS­TER DHAR­MEN­DRA PRAD­HAN VIS­ITED ST. PETERSBURG LAST MONTH

Resource Digest - - CONTENTS -

Rus­sia has of­fered In­dian oil com­pa­nies a stake in the se­cond phase of Ya­mal LNG, the big­gest project to pro­duce liq­ue­fied nat­u­ral gas in the Arc­tic. The of­fer of stake in JSC Ya­mal LNG was made when Oil Min­is­ter Dhar­men­dra Prad­han vis­ited St. Petersburg last month, sources privy to the de­vel­op­ment said.

Petronet LNG, In­dia's big­gest nat­u­ral gas im­porter, is study­ing the of­fer, they said, adding other state-owned firms like In­dian Oil Corp (IOC) may join in later.

No­vatek OJSC, Rus­sia's se­cond-big­gest nat­u­ral gas pro­ducer, had in 2013 of­fered a 9 per cent stake in the USD 27 bil­lion Phase-i of Ya­mal LNG project to a con­sor­tium of Petronet, IOC and ONGC Videsh Ltd.

But later, OVL, the over­seas arm of state-owned Oil and Nat­u­ral Gas Corp (ONGC), did not find the of­fer at­trac­tive and the In­dian con­sor­tium backed off.

No­vatek stitched a con­sor­tium with CNPC of China (20 per cent), To­tal of France (20 per cent) and China's Silk Road Fund (9.9 per cent).

The Rus­sian firm holds 50.1 per cent stake in the project that com­prises de­vel­op­ment of the South-tam­beyskoye field with proven de­posits of 1.3 tril­lion cubic me­ters of nat­u­ral gas and the con­struc­tion of nat­u­ral gas liq­ue­fac­tion plant (LNG) for pro­duc­ing 16.5 mil­lion tonnes of LNG a year by 2017.

Now the com­pany is plan­ning a se­cond phase and is of­fer­ing a stake to In­dian firms, sources said.

Sources said OVL was pre­vi­ously in­ter­ested in get­ting into the up­stream part of the project, i.e gas field de­vel­op­ment. Petronet was keen to off­take LNG. OVL, they said, may en­vis­age in­ter­est if the stake is ac­com­pa­nied by some say in up­stream part.

Ovl-ioc-petronet were orig­i­nally in­ter­ested in tak­ing up to 15 per cent stake in Ya­mal project, which also re­quires con­struc­tion of an air­port and port on the Arc­tic Ocean. But a smaller 9 per cent stake was of­fered to them after No­vatek in Septem­ber 2013 sold a 20 per cent stake in the project to CNPC.

To­tal SA had in March 2011 bought 12 per cent stake in the project for about $4 bil­lion. Since then, it has raised the stake to 20 per cent.

Sources said Petronet, which op­er­ates two LNG im­port fa­cil­i­ties in Gu­jarat and Ker­ala, has been of­fered the stake in phase-ii as it of­fers a ready buyer of gas.

In Petronet, Rus­sia seeks a buyer who can take at least 5 mil­lion tonnes a year of LNG from the Arc­tic project.

CNPC had pledged to pur­chase at least 3 mil­lion tonnes a year of LNG from the phase-i of Ya­mal project.

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