France's Total Strikes Deal With Russian Gas Group Novatek

March 3, 2011 - PRLog -- France's Total energy group, which has oil and gas operations spanning the globe, said it had entered into a new strategic partnership Thursday with the independent Russian gas group Novatek.

Total said it had signed two memorandums of cooperation with Novtek.

Under the terms of the memorandums, Total will become Novatek's main international partner in the Yamal liquefied natural gas (LNG) project and hold a 20 percent share in the project compared with Novatek's 51 percent stake.

In a further development, Total will take an initial 12.08 shareholding in Novatek, on the basis that the shareholding will be ramped up to 15 percent in 12 months, and then to 19.40 percent within 36 months.

The Yamal LNG project will develop the South Tambey field which is located in the artic area of the Yamal peninsula. The reserves of the condensate and gas field are estimated at 44 trillion cubic feet of gas, enabling production of over 15 million tons of LNG per year, according to a Total statement.

The Yamal project is considered crucial by the Russian authorities and has been designated as being in the country's national interest.

Novatek is Russia's largest independent gas producer and supplies 10 percent of the domestic market. Total has a had a presence in Russia since 1989 and presently operates the Kharaga field in the Nenets Autonomous Region with a 40 percent interest.

Author: Mike King, analyst.

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