Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, commented to InfoTEK on the possible entry of NOVATEK into the Sakhalin-2 project.
Aleksey Belogoryev believes that the company's main interest lies in obtaining a long-term contract from Shell until 2028 for the supply of 1 million tons of LNG annually.
According to him, Novatek, despite the large capacity of the Yamal LNG project, does not have many opportunities for trading LNG - about 2.5 million tons per year. The remaining volumes are distributed between Total and other shareholder companies.
At the same time, even out of these 2.5 million tons, Novatek sells volumes mainly not directly, but through intermediaries.
The expert noted that Novatek may encounter opposition from Gazprom in the process of obtaining a share of Shell, since the entry of a new company into the project will most likely be unprofitable for the gas monopoly.
“Novatek doesn’t have much capacity that it can maneuver with. Therefore, Shell’s volumes will allow it not only to increase revenues, but also to enter new markets in Southeast Asia, gain a foothold in India and Singapore,” Belogoryev said.
The expert added that Novatek is also unlikely to be able to help build the third line of the LNG plant, the issue of which has been discussed over the past few years.
"I see no reason for Gazprom to agree to this, except to share the risks," Belogoryev said.
“There are problems with the resource base, while Gazprom has big plans to supply gas to China via the Far Eastern route, the government has plans to gasify the Khabarovsk and Primorsky Territories. The resources of Sakhalin itself are quite limited, so there is no gas for the third line yet,” the analyst explained.
Subscribe for updates
and be the first to know about new publications