NOVATEK is ready to enter Sakhalin-2

Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, commented to the Kommersant newspaper on the Sakhalin-2 project operation.

According to Kommersant, NOVATEK is ready to acquire 27.5% in the Sakhalin-2 project, belonged to Shell, which left the Russian Federation. The selection of the new owner of this share is delayed due to the fact that the government did not have time to assess the damage caused by the foreign shareholder to the project. NOVATEK asks to expedite the procedure. However, it is not yet clear how NOVATEK will recoup potential investments in Sakhalin-2 and, in particular, whether it will get Shell's lucrative long-term contract to receive 1 million tons of LNG from Sakhalin-2.

Sergey Kondratiev believes that Shell's long-term contract will most likely not return to the general pool of the project and will go to NOVATEK. However, the expert clarifies, significant legal risks are formed by the position of Shell, which announces plans to protect its rights to participate in the project and existing contractual obligations.