Novatek has moved to calm potential fears among international investors in its huge Russian liquefied natural gas developments over proposals to ban LNG exports to European markets.

Chairman Leonid Mikhelson said the proposals to restrict or even prohibit some Russian LNG exports could not be implemented in law.

State-controlled gas monopoly Gazprom and several government officials had made the proposals to Russia's lower house of the parliament — the Duma.


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“LNG is a global market. How can the law [of a separate country] regulate it?” said Michelson.

The proposals would be aimed at LNG cargoes going to markets already supplied by Russian pipeline gas.

Russian news agency Interfax said last week that the country’s ministries are also working on proposals to liberalise LNG exports from Russia.

Since its start-up in 2017, the Novatek-led Yamal LNG project in northern Russia has delivered cargoes to numerous countries, including the US, which is itself an LNG exporter.

The project’s initial plan had envisaged sending 80% of its output to Asia Pacific markets, Mikhelson has said.

In the past two years, several Gazprom executives have blamed Novatek, the country's largest independent gas producer, for the growth in LNG supplies from Yamal LNG to Europe, forcing the state-run monopoly to explore alternative pricing schemes and offer post-delivery rebates to European customers to stimulate purchases.

However, Gazprom reported a record 45% rise in gas exports to Europe in January to 19.3 billion cubic metres as most of the LNG cargoes available on the global spot market headed to Asia because of higher demand and better prices out east.

As a result, Gazprom’s total gas output in Russia increased by over 6% to 47 Bcm in January after a double-digit decline last year as energy demand in Europe and in Russia was hurt by Covid-19 closures.

Novatek is joined at Yamal LNG by French supermajor Total and Chinese players Silk Road Fund and China National Petroleum Corporation (CNPC).

Besides Yamal LNG, Novatek is also a 60% shareholder in Arctic LNG 2, with foreign investors holding the remaining interests in the project.

At Arctic LNG 2, Novatek, Total and CNPC are joined by China National Offshore Oil Corporation and a consortium of Japanese duo Mitsui and Jogmec.

Novatek also leads the Obsky LNG and Arctic LNG 1 projects in West Siberia, with LNG exports from company’s developments in Russia expected to rise to over 70 million tonnes of LNG by 2030.