Russia's Novatek Reaches Long-Term LNG Supplies Deal With Shell

Russia’s Novatek gas company announced Thursday that its subsidiary had concluded a long-term contract with Shell International Trading Middle East on liquefied natural gas (LNG) supplies.

MOSCOW (Sputnik) — Novatek will supply about 0.9 million tons of LNG for the next two decades from volumes purchased by Novatek Gas & Power originating at northern Siberia's Yamal LNG plant, due to become operational in 2017.

"We are currently finalizing Novatek’s contract portfolio for the supply of LNG from the Yamal LNG project. Considering the extensive expertise of Shell, we are planning to further develop our cooperation in the LNG sector," Novatek management board chairman Leonid Mikhelson said, as quoted in a company statement.

On Tuesday, Novatek Gas & Power initiated a 23-year contract with French Engie company stipulating an annual supply of 1 million tons of Yamal LNG gas supplies.

The Yamal LNG is one of the largest petrochemical extraction and production projects in the Russian Arctic. It is expected to have a capacity of 16.5 million metric tons of gas a year, much of which will be supplied to China to meet a growing energy demand.

Shareholders of Yamal LNG are Novatek (60 percent), Chinese company CNPC (20 percent) and French Total (20 percent).