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    Novatek Adds to Gydan Reserves in Russia (Update)

Summary

Russia's leading independent producer Novatek won an auction for the rights to explore for and produce gas from the Payutitsky region in western...

by: William Powell

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Novatek Adds to Gydan Reserves in Russia (Update)

Russia's leading independent producer Novatek won an auction for the rights to explore for and produce gas from the Payutitsky region in western Siberia, it said March 22.

The region has estimated hydrocarbon resources of 354mn barrels of oil equivalent, according to the Russian resource classification system which ignores the economics of production, and contains the Nanadyanskoye gas field. 

Payutskiy is close to some of Novatek's other licences on the Gydan peninsula: West Solpatinskiy, North Tanamskiy, Nyavuyahskiy and Tanamskiy. Novatek already owns a significant resource base on the Gydan peninsula including the Utrenneye, Geofizicheskoye, Gydanskoye, Shtormovoye and Ladertoyskoye fields. This new licence, for which it paid roubles 66mn ($1.2mn), allows Novatek to expand its hydrocarbon resource base on the Gydan peninsula, and to consider developing significant long-term projects to boost the company’s production, it said.

It did not mention LNG in its statement: the company already operates one LNG facility on the Yamal Peninsula, which is immediately to the west of Gydan on the other side of the Gulf of Ob. The first train of three trains started in late December and when at full strength it have a nameplate capacity of 16.5mn mt/yr and have cost $27bn. Yamal LNG announced March 2 it had shipped its first million tons of LNG produced at train 1, all within three months of beginning exports.

Novatek is considering a second LNG complex in western Siberia, Arctic-2 LNG, with  capacity to produce 18.3mn mt/yr at Gydan early next decade and has approached Saudi Aramco, Marubeni  and others as possible co-investors in this estimated $19bn venture.