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2019-03-01 12:00:00

RUSSIA'S LNG: NO SANCTIONS

RUSSIA'S LNG: NO SANCTIONS

REUTERS - Russian gas giant Novatek and oil major Shell said on Wednesday Russian gas would remain more competitive in Europe than U.S. gas, as Moscow pursues new mega projects that would be insulated from any new U.S. sanctions.

The United States has already imposed numerous sanctions against Russian individuals and companies over Moscow's interference in Ukraine, alleged meddling in the 2016 U.S. presidential election, and accusations it was behind a nerve agent attack in Britain. Russia denies the allegations.

Washington is mulling new sanctions that could put further strain on Russia's economy and companies. So far, there have been no sanctions affecting conventional or liquefied natural gas (LNG) production in Russia.

Novatek's Chief Financial Officer Mark Gyetvay said the company would build all equipment and technology in Russia to protect itself. "We will not hold ourselves hostage to U.S. sanctions," he told the IP Week conference in London.

He said Novatek was able to deliver LNG to Europe for $3.15 per million British thermal units (mmBtu) compared to $7-$8 for U.S. producers. That is also well below the average price in Europe that Gazprom expects for its gas this year of at least $230 per 1,000 cubic meters, or $6.4 per mmBtu.

Gyetvay said Novatek was extracting gas at a cost of 10 cents per mmBtu versus $3 in the United States, and liquefying gas for 50 cents versus $3 in America.

"Russian gas will be very competitive versus the U.S. Gulf coast," he said.

Gyetvay appeared to be referring to typical contracts of the dominant U.S. LNG producer Cheniere Energy and its customers, whose main elements are a U.S natural gas futures price plus 15 percent, and a $3 liquefaction fee per mmBtu.

But gas prices in U.S. shale regions have been as low as 25 cents per mmBtu and have even been heard to be negative, meaning the producer pays to offload gas. Gas is also flared, as some producers are primarily set up to sell oil.

Energy companies are flooding Europe with U.S. natural gas, establishing a foothold in a market dominated by Russia and seen as a key battleground in Washington's efforts to curb Moscow's energy influence.

That influx has helped depress LNG prices, with the Asian spot price heard at about $6.2 per mmBtu last week and European LNG spot prices just below the North West European gas hub price of around $6 per mmBtu.

Gyetvay also said Novatek was raising its guidance for the production of sea-borne LNG to 70 million tonnes per year by 2030 from 50-57 million tonnes previously.

The biggest producer of LNG in the world, Qatar, currently produces 77 million tonnes per year and plans to reach 110 million by the middle of next decade.

Shell, which has a long history of energy cooperation with Russia, said it had created a new 50/50 venture with Russian state giant Gazprom that would use Shell LNG know-how to develop Russia's own technology for supercooling gas.

The venture will effectively insulate Russia from any new U.S. sanctions on LNG where technology belongs to only a handful of players - mainly global oil majors such as Shell, Exxon and Total.

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Earlier:

RUSSIA'S LNG: NO SANCTIONS
2019, February, 25, 12:05:00
GLOBAL LNG TRADE +11%
SHELL - Strong demand for cleaner-burning fuel in Asia continued to drive rapid growth in liquefied natural gas (LNG) use in 2018, with global demand rising by 27 million tonnes to 319 million tonnes, according to Shell’s latest annual LNG Outlook.
RUSSIA'S LNG: NO SANCTIONS
2019, February, 22, 11:35:00
NOVATEK INCOME +4.7%
NOVATEK - Profit attributable to shareholders of PAO NOVATEK increased to RR 163.7 billion (RR 54.33 per share), or by 4.7%, as compared to 2017.
RUSSIA'S LNG: NO SANCTIONS
2019, February, 15, 12:25:00
НОВЫЕ РУССКИЕ САНКЦИИ
МИНФИН РОССИИ - Знаете, все уже устали, наверное, от санкций — первое. Второе: мы уже не первый раз с ними сталкиваемся и примерно понимаем, как на них реагировать, и подготовили определенную базу. Следующее: мы говорим о том, что даже если будут введены санкции на финансовый сектор, с ЦБ у нас есть понимание действий, которые нужно совершить в отношении банков, попавших под ограничения.
RUSSIA'S LNG: NO SANCTIONS
2019, February, 13, 12:00:00
U.S. LNG FOR EUROPE
PLATTS - Europe is likely to be a prime destination for US LNG cargoes well into the next decade as shipping costs make Europe preferable to Asia as a destination for US exporters, Massimo Mantovani, head of gas and LNG marketing at Italy's Eni, said Monday.
RUSSIA'S LNG: NO SANCTIONS
2019, February, 11, 10:35:00
RUSSIA SANCTIONS ISN'T OBSTACLE
PLATTS - "Imports of Russian crude oil and LNG do not go through any chokepoints such as the Strait of Hormuz. Therefore they are important for the diversification of Japan's energy import sources, and I hope that Russia will play an even larger role. I would like to continue working to expand our cooperation," Seko said.
RUSSIA'S LNG: NO SANCTIONS
2019, January, 25, 08:05:00
NOVATEK RESERVES: +4%
NOVATEK - Total SEC proved reserves, including the Company’s proportionate share in joint ventures, aggregated 15,789 million barrels of oil equivalent (boe), including 2,177 billion cubic meters (bcm) of natural gas and 181 million metric tons (mmt) of liquid hydrocarbons. Total proved reserves increased by 4% compared to the year-end 2017, representing a reserve replacement rate of 222% for the year, addition of 1,218 million boe, inclusive of 2018 production.
RUSSIA'S LNG: NO SANCTIONS
2019, January, 25, 08:00:00
NOVATEK'S GAS PRODUCTION: +10%
PLATTS - "We're increasing gas production by up to 10% taking into account Yamal LNG, with liquids output, including crude and condensate, to grow by around 2%, I think," Mikhelson was quoted as saying on the sidelines of the World Economic Forum in Davos.
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Tags: RUSSIA, LNG, GAS, EUROPE, NOVATEK