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    Novatek To Gain More Arctic Acreage

Summary

Russia has ringfenced many new Arctic gas licences for Novatek, to support its LNG ambitions.

by: Joseph Murphy

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Novatek To Gain More Arctic Acreage

The Russian government has issued a decree to auction off another gas licence in the Arctic this year, with Novatek lined up to secure the project.

The decree, published on the government’s website on October 29, orders the sale of rights to the Bukharinsky block, located on the Gydan Peninsula straddling the shore of the Ob Bay. The block spans 2,447 km2, including 840 km2 offshore, and is estimated to hold 213bn m3 of gas and 44mn mt of condensate in prospective and forecasted resources.

The government did not specify when the contest would take place, although the starting price for bids is set at rubles 2.133bn ($33mn). Novatek is the only company eligible to participate, as auction terms state that only operators that already have licences on the Gydan and Yamal peninsula that require them to produce LNG can place bids.

Russia has ringfenced almost all new gas licences on the Yamal and Gydan Peninsula for Novatek, to support its LNG projects in the area. The company is aspiring to produce as much as 70mn mt/yr of LNG by 2030, underpinning Russia’s ambition to become one of the world’s leading LNG suppliers.

Novatek recently secured rights to the Soviet-era Soletsko-Khanaveyskoye gas field on Gydan at auction. Similarly, the government effectively barred any other companies from taking part in the contest.