Putin May Hand Over Gazprom's Giant Arctic Fields to Novatek

Novatek has reportedly asked Russian leader Vladimir Putin to make state-run Gazprom sell its giant Tambei cluster of gas fields on the Yamal Peninsula. If approved, the sale would significantly boost Novatek’s resource base for LNG expansion in the Arctic. The Arctic is a core region for Russia’s plans to expand LNG production to up to 140 million metric tons per year by 2035 from around 30 million tons in 2020 (LNGI Mar.22'21). Russia’s long-term LNG development program, approved in March, says that the 5.5 trillion cubic meter Tambei field, the key field of the group, could feed a 20 million ton/yr LNG plant starting in 2030 (NC Mar.25'21). Gazprom boss Alexei Miller had a meeting with Novatek CEO and key shareholder Leonid Mikhelson on Apr. 16 to discuss cooperation between the two companies, the state-run gas giant said without providing details. Business daily Kommersant reported Monday citing a source that Mikhelson offered to buy the Tambei fields, paying partly in cash and partly with Novatek shares. Gazprom already has a 9.99% stake in Novatek. Novatek has long set its sights on Gazprom’s vast resources in the Arctic, but now it has apparently managed to convince Putin that the Tambei group, with estimated 7.3 Tcm in gas reserves, should feed LNG production in the region, Kommersant reported. Novatek plans to produce up to 70 million tons/yr in the Arctic by 2030, up from 18.8 million tons in 2020. Gazprom has been weighing Tambei monetization options together with its partner RusGazDobycha. The two already team up at the 45 billion cubic meter per year Ust-Luga gas processing and LNG project in northwestern Russia (LNGI Mar.26'21). A source close to the project tells Energy Intelligence that ethane-rich Tambei gas could be piped to the Ust-Luga complex, where it might gradually substitute for gas from the Nadym-Pur-Taz area, the initial resource base of Ust-Luga scheduled to start in 2023-24. An industry expert agreed that sourcing Ust-Luga with the Arctic gas could be reasonable in terms of economics and could fit into Russia’s strategy to monetize Arctic resources through LNG expansion. RusGazDobycha’s press office did not rebut the information. Gazprom did not comment. Novatek is understood to be willing to process Tambei’s ethane-rich gas at a proposed giant petrochemical cluster in Sabetta, the idea of which was first mentioned by Deputy Prime Minister Alexander Novak in late 2020. Sabetta is the home port of Novatek’s operating Yamal LNG plant launched in 2017 and Arctic LNG 2 scheduled for launch in 2023. Vitaly Sokolov, Moscow