Novatek began selling LNG from Yamal on contracts

Novatek, the largest private gas producer in Russia, has started delivering liquefied natural gas from the Yamal LNG plant on contracts since April, Leonid Mikhelson, chairman of the company's board, said on Friday.

The first stage of the Yamal LNG plant for 5.5 million tons was launched in December last year, the first gas supplies went to the spot market.

More than 96 percent of supplies from Yamal are contracted for the next 20 years by buyers from Asia.

Mikhelson said that the gas condensate goes to the spot market, there are no contracts for its supply.

The dispatch of the first tanker with Yamal gas marked the end of the export monopoly of Gazprom, which supplies gas mainly to Europe, but plans large deliveries to China via the Siberia-Siberia gas main.

Mikhelson believes that Novatek can avoid competition with pipeline gas, controlling the territorial linkage of supplies under long-term contracts.

"We are currently considering an LNG transshipment project in Kamchatka - this will improve our logistics and tie the entire volume to the market (Asia)," he said.

According to Mikhelson, this year Gazprom, which has a contract with Novatek to supply LNG from Yamal, will receive 5-6 lots tied to the Indian market.

The second turn of Yamal LNG Novatek plans to launch in September.

(With inputs from Reuters)