NOVATEK chairman Leonid Mikhelson has confirmed that the Russian independent will bid for the Gydansky block in a remote area of the Yamal-Nenets autonomous region in West Siberia, writes Vladimir Afanasiev.

Speaking to reporters in Beijing, China, Mikhelson indicated that the company is interested in obtaining a licence for the block under its long-term ambitious plan to grow LNG production in the north of Russia.

Earlier in April, Russian Prime Minister Dmitry Medvedev ordered the natural resources ministry to auction the Gydansky block on the Gydan Peninsula before the end of this year

The block includes the Gydan gas and condensate field that was discovered in 1978, with estimated recoverable reserves of almost 420 billion cubic metres of natural gas and 240 million barrels of condensate.

The block is likely to contain other gas and condensate reservoirs that the government wants the winning bidder to search for during the initial exploration period of the licence.

According to the resolution, the winning bidder will have to agree to pay at least 2 billion rubles ($35 million) for the exploration and development licence for the block.

Novatek already owns licences for three onshore blocks on the Gydan Peninsula, as well as two offshore shallow water blocks between the Gydan and Yamal Peninsulas.

Novatek argues that it is capable of commissioning its greenfields considerably faster than its rival, state controlled Gazprom gas monopoly, suggesting recently that first LNG from the Salmanovskoye field on the Gydan Peninsula could flow in the 2022-2023 timeframe.

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Novatek confirms bid for Gydansky block