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Governmental support to Yamal LNG

The Sabetta port will become one the biggest in the Arctic.

In a meeting with Novatek’s President Leonid Mikhelson last week, President Vladimir Putin promised to help the company’s giant Yamal LNG project, suffering under Western sanctions.

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“The sanctions have imposed some financial restrictions on the project, because NOVATEK was included on the list of sanctioned companies,” Mikhelson said in the meeting. “But thanks to your support, the possibility of receiving money from the National Welfare Fund is being examined at the moment. This would not be such a big sum – 18 percent of our total needed financing. It is very important though for everyone to see that the state authorities support this project.

The Yamal LNG plant will be built based on the resources of the South Tambey gas condensate project, a field which holds about 1,25 trillion cubic meters of gas.  

Novatek has reported that its July-September net profit decreased to 7.6 billion rubles, according to Reuters.

“I am aware of the complicated matters that you mentioned. I have discussed the options with the Government and the need to give this project our support, and we have decided that we will give you the help you need,” Putin said.

According to Mikhelson, the project is going as planned. 7,000 builders are working at the site. Housing and facilities for 12,000 builders are nearly complete. “We already have contracts for 100 percent of our LNG: 27 percent to China, 36 percent to other Asia-Pacific region countries, and we have sold around 3 million tons to the Indian market through Gazprom Export. We have contracts for the entire output.”

The Yamal LNG project is developed by the JSC Yamal LNG, a joint venture of Novatek (80%) and Total (20%), and in close cooperation with the Federal Agency of Sea and River Transport and the Rosmorport state enterprise. 

A key component of the project is also the development of the Sabetta port. When completed, reportedly in 2016, the port will be able to handle specially designed ArcticLNG carriers shipping liquefied gas from the field to European, South American and Asian markets.