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    India eyes Russian Arctic LNG deal: press


No deal has yet been agreed, but negotiations have started, India's energy minister says.

by: William Powell

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Complimentary, Natural Gas & LNG News, Europe, Liquefied Natural Gas (LNG), Corporate, Arctic Focus

India eyes Russian Arctic LNG deal: press

Indian energy companies ONGC and Petronet LNG are mulling involvement in Novatek's second LNG development in Russia's far north, Arctic LNG-2, Interfax reported September 6. Following recent proposals from the majority owner Novatek, they are discussing both offtake and investment options in the follow-on project to the operational Yamal LNG project, the Russian agency said, citing an anonymous source.

Offtake agreements have become more attractive this summer as the world appears to be running low on spot LNG. The tightness in the market has sent wholesale prices to record levels and made the more polluting coal more attractive for power generation in some places.


The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business.


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India's energy minister Hardeep Singh Puri was visiting Russia with representatives from those two companies as part of the Eastern Economic Forum in the Russian Pacific port of Vladivostok September 4-6. "All [the options] are on the table," he said, when asked whether the offer was for an equity stake or LNG off-take only. 

An Indian company representative who was involved in the talks said, on condition of anonymity, that Novatek was offering 9.9% of its stake out of its own 60%, but that no agreement had been reached, adding the offer of a stake was a recent development. Other investment opportunities that came up during the forum included participation in Rosneft's Vostok Oil project and petrochemical projects. Puri spoke positively about closer economic and energy ties with Russia. 

During the forum, Novatek CEO Leonid Mikhelson said he did not expect financial support for the project from European governments, which would take the form of export credit guarantees. French Total has a 10% stake in the project, with the other 30% divided equally between China's CNPC and CNOOC and a Japanese joint venture.

Long-term contracts indexed to oil are now a lot cheaper than spot and LNG project developers need long-term contracts to enable more affordable finance, although for much of the last decade or two, buyers have demanded a shift to short-term price indexation to take advantage of the supply-demand situation. For more on Novatek's LNG plans, read an interview with CFO Mark Gyetvay here.