Russia’s largest independent gas producer Novatek has emerged as the sole bidder for an exploration and development licence for the Gydansky block in a remote area of the Yamal-Nenets autonomous region in West Siberia as auction terms were revealed.

According to Russia's Minister of Natural Resources & Environment, Sergey Donskoy, two Novatek subsidiaries — Arctic LNG 1 and Yurkharovneftegaz — have submitted bids to participate in the tender for the licence, to be held in Moscow on 9 June.

For the tender to be considered valid under Russian law, it must have at least two bidders.

However, at the end of last week, gas giant Gazprom said that authorities had prevented it from bidding for the block by tailoring tender terms specifically for Novatek.

According to a key clause in the tender documentation, companies that are permitted to participate in the auction must have liquefaction facilities located on the Yamal Peninsula in the region.

Novatek holds a 51% stake in Yamal LNG, which is set to commission the first train of a liquefied natural gas plant to underpin the development of the South Tambeyskoye field on the peninsula before the end of this year.

Gazprom, which is developing the large Bovanenkovskoye field on the peninsula and is preparing to commission nearby gas deposits in the next several years, ships all its Yamal gas output via trunk pipelines to Russia and Europe.

Gazprom deputy executive board member Vselovod Cherepanov said last week that the monopoly has no plans to contest the terms of the tender with the federal anti-monopoly service.

The Gydansky block includes a major gas and condensate field that was discovered in 1978, with estimated recoverable reserves of almost 420 billion cubic metres of 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.

The winner will have to agree to pay at least 2 billion roubles ($35 million) for the licence, according to the tender terms.

Novatek already owns three Gydan Peninsula onshore licences, east of the Yamal Peninsula, and two shallow-water blocks between the two peninsulas.

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Novatek is sole bidder in Gydansky block tender