Russia offers Indian firms a stake in Yamal LNG
The Dollar Business Bureau
Russia has made an offer to Indian oil firms for a stake in Phase II of Yamal LNG, the largest proposed liquefied natural gas project in the Arctic.
The stake offer was made when Dharmendra Pradhan, Minister of State for Petroleum and Natural Gas of India, visited Russian city St. Petersburg last month, according to sources.
Petronet LNG Ltd, India's leading importer of natural gas, is examining the offer and other state-owned companies such as Indian Oil Corporation Ltd (IOC) may join in afterwards, sources said.
In 2013, Novatek OJSC, Russia's biggest independent producer of natural gas, had offered a stake of 9 percent in the $27 billion Phase I of Yamal LNG to a consortium of IOC, ONGC Videsh Ltd (OVL) and Petronet LNG.
However, the Indian consortium backed off as OVL, the overseas subsidiary of government-owned Oil and Natural Gas Corporation Ltd (ONGC), didn’t find the offer lucrative.
Novatek formed a consortium with China’s CNPC (with 20 percent stake), France’s Total (with 20 percent) and China's Silk Road Fund (having 9.9 percent). The Russian company holds the majority share of 50.1 percent in the project.
The project involves development of the South-Tambeyskoye field and construction of LNG plant for producing 16.5 million tonnes of LNG per year by 2017. The field has confirmed deposits of 1.3 trillion cubic meters (TCM) of natural gas.
The Russian company is now planning a phase II and is offering a share to the Indian companies, sources said.
OVL was earlier interested to be involved into the upstream portion of the Yamal project, that is the development of gas field, they added.
The consortium of OVL, IOC and Petronet were initially interested in acquiring a stake of up to 15 percent in Yamal project, which also involves building an airport and a port on the Arctic Ocean. However, a smaller stake of 9 percent was offered to the consortium after Novatek sold a stake of 20 percent in the project to China’s CNPC in September 2013.