Novatek may buy assets to raise production of gas in Russia

MOSCOW, Apr 21 (PRIME) -- Russian independent gas producer Novatek may buy assets to boost production of natural gas and plans to increase the resource base until the end of 2017 to maintain production, CEO Leonid Mikhelson told reporters on Friday.

“We are now holding a lot of negotiations, we are studying our possibilities beyond the creation of an additional resource base for the Yamal LNG project, including an additional resource base in the region of our existing infrastructure, I mean Urengoi, and including an increase of our production capacities,” he said.

“I think we will be able to form this resource base until the end of the year and it will allow us to maintain the current plateau in the existing region of production so that we keep our share of the internal gas market.”

He said that the company is considering all the possibilities, including purchases of new assets.

The company’s gas production fell 8.8% on the year to 15.72 billion cubic meters in January–March, while production of hydrocarbons decreased 8.5% to 127.7 million barrels of oil equivalent.

“We’ve said before that our production will contract slightly (in 2017). We’ve acquired several licenses, and we are increasing geological exploration. Over the past two years, we focused our financial efforts on financing the Yamal LNG on schedule, and I’m not sorry about the decision,” he said.

Novatek is also interested in small investments in the liquefied natural gas (LNG) market in order to “have an ensured portfolio at the LNG market,” he said. “We are interested in the bunkering business in the first place, and in the business of fueling heavy transport, we are studying it with our partners,” he said.

He also said that the company is in talks with Italian engineering company Saipem on its participation in development of some LNG projects, including the Arctic LNG-2 project, and on general cooperation in the LNG sphere.

“Speaking of these projects, we see them as possible partners. We are holding negotiations with Saipem, and I am sure to a certain degree that they will play a significant role in our future projects,” Mikhelson said.

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