Total, Novatek start gas production at Siberian project

Total, Novatek start gas production at Siberian project

PARIS: French oil major Total said on Wednesday it had started gas and condensate production at its Termokarstovoye field in northern Siberia, the first of a string of projects with Russia’s Novatek to come to fruition. 

Total, which owns 18 per cent of Russia’s second-largest gas producer, has also been developing the bigger $27 billion Yamal liquid natural gas (LNG) project with Novatek, whose funding has yet to be finalised as sanctions made raising money in U.S. dollars impossible.

The Termokarstovoye project in Yamal-Nenets, a frozen and sparsely inhabited region of Siberia, has not been affected by the sanctions imposed on Russia by the West, however, and becomes the fourth start-up for Total so far this year.

“It’s an important start-up for us because this was really the project that cemented the relationship between Total and Novatek,” Michael Borrell, Total’s head of exploration and production in Europe and Central Asia, told Reuters in an interview.

The deal to work jointly on Termokarstovoye, which will produce 6.6 million cubic meters of gas and 20,000 barrels of condensate per day, marked Total’s emergence as one of Russia’s preferred foreign oil firms when it was signed in 2009 and helped it get a foothold in Yamal.

Total, a strong critic of U.S. and European sanctions on Russia, now expects the country to be the group’s largest source of oil and gas production in 2020.

“All of these projects we are talking about today were in place prior to the issues that caused the sanctions, and we have been able to continue with these projects in the current environment,” Borrell said.

The group had to stop increasing its stake in Novatek when the MH17 Malaysia Airlines flight was downed over Ukraine last year, however, and has also put projects with Lukoil in the Bazhenov basin on hold.

Share Button