Novatek bids for Sakhalin-2 stake
Russian LNG exporter Novatek has applied to join the consortium developing the Sakhalin-2 LNG and oil project in the Far East, following the recent exit of Shell, Russian media has reported.
Under a Russian presidential decree in June last year, a Russian stock company called Sakhalinskaya Energia was appointed as the new operator of Sakhalin-2, replacing Sakhalin Energy. The latter's shareholders were offered the opportunity to maintain their existing stakes in the project through Sakhalinskaya Energia, and while Japan's Mitsui and Mitsubishi accepted the offer, Shell, the owner of a 27.5% interest in Sakhalin Energy, declined.
Shell vowed to withdraw from Russia in response to Moscow's invasion of Ukraine.
Novatek confirmed to Russia's TASS news agency on April 3 that it had applied to join the Gazprom-operated project. Shell's stake will now be valued and sold, with proceeds to go to a special account, the agency reported. The government will also undertake an audit to assess whether other foreign shareholders at Sakhalin-2 are complying with the project's production-sharing agreement (PSA).
Shell has also divested its lubricants and fuel business in Russia to Lukoil and its stake in the Salym Petroleum oil project in Western Siberia to Gazprom Neft. It joins a number of other international oil majors including BP and ExxonMobil that have departed from Russia in the last year. ExxonMobil claimed its assets, namely a stake in the Sakhalin-1 oil project, were expropriated.
Sakhalin-2 has a liquefaction capacity of around 11mn metric tons/year and primarily serves the Japanese market as well as other Asian markets.