EDF reported to join Novatek and Total in Yamal LNG
EDF may join OAO Novatek (Novatek) and Total in Yamal LNG since the project has been declared of national interest by the Russian authorities for fast-track implementation.
Russia is now willing to boost its oil and gas exploration and production to compensate depleting fields and sustain the future Russian GDP.
For the time being options are being tabled on the manners of increasing LNG annual capacity in Russia for additional 60 million t/y, since at the moment the capacity of Gazprom’s Sakhalin-2 LNG project amounts to 10 million t/y.
The Yamal LNG project is based on the resources of the South-Tambeyskoye field located in the arctic area of the Yamal peninsula.
The resources of this condensate and gas field will allow production of more than 15 million t/y of liquefied Natural Gas (LNG).
Yamal proved and probable reserves (2P) are estimated to approximately 800 million barrels of oil equivalent (boe).
Novatek and Total are targeting a plateau production of about 90,000 boe/d.
Actually the working interest in Yamal LNG are split between:
- Novatek from Russia 80%
- Total from France 20%
Anyway Novatek is looking for partners and sharing costs in the project implementation but to remain majority stakeholder in the project with at least 51 % share.
The French utility company EDF is reported to take a share of the joint venture from Novatek.
Novatek will make public the final decision on future partners in the Yamal LNG project before the end of this year.
CB&I completed the FEED for Yamal LNG
Yamal LNG, as Novatek and Total joint venture had contracted CB&I Lummus to carry out the preliminary front end engineering and design (pre-FEED) work, which was completed in early 2011.
Since then CB&I Lummus has been working on the project’s FEED stage expected to be completed on mid 2012.
From the project feasibility study and the FEED, Yamal LNG would request the construction of an onshore LNG facility located near Sabetta on the Yamal pensinsula.
Actual design of the onshore LNG facilities is based on three LNG trains providing total capacity of 15 million t/y.
Within the project framework, the South-Tambeyskoye field development will include:
- Production drilling
- Construction of a gas gathering system
- Gas complex processing facility
- Gas condensate processing unit
- LNG plant made of 3 LNG trains
- Gas pipelines for gas transportation from the field to the plant
- Offshore shipping terminal
- Transport infrastructure system (including an airport, terminal and highways).
Novatek and Total expect to complete with $20 billion capital expenditure and run Yamal LNG into operations in 2017.
Total in brief
Total is a french major IOC which is present in Russia since 1989.
Total is operator of the Kharyaga field located in the Nenets Autonomous Region with a 40% interest.
In July 2007, Total and Gazprom signed an agreement regarding the first phase of development on the Shtokman field where Total holds a 25% interest.
In Russia, as in other host countries, Total is committed to promoting local development.
In every project in which it participates, Total creates sustainable jobs and trains employees to manage operations safely and efficiently.
Total also supports public health, education and cultural programs.
Notably, it financed the construction of a school in Narian-Mar, the administrative center of the Nenets Autonomous District, and is a key sponsor of St. Petersburg’s famous Mariinsky Theater.
Since 2009, Total and Novatek are jointly developing the Termokarstovoye field.
Novatek in brief
Novatek is Russia’s largest independent natural gas producer and the second-largest natural gas producer in Russia after Gazprom.
Founded in 1994, Novatek is engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons.
Novatek’s upstream activities are concentrated in the prolific Yamal-Nenets Autonomous Region, which is the world’s largest natural gas producing area and accounts for approximately 84% of Russia‘s natural gas production and approximately 17% of the world’s natural gas production.
Novatek supplies approximately 13% of the domestic natural gas market with a production of 25.3 billion cubic metres of natural gas for the first semester of 2011.
Novatek is an open joint stock company established under the laws of the Russian Federation.
Novateks‘ shares are listed in Russia, in London Stock Exchange and on the Nasdaq.
After a first estimation around $20 billion, the capital expenditures are turning closer to $27 billion and therefore require partners such as EDF to join the actual joint venture Novatek-Total in Yamal LNG.
