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UPDATE 1-Novatek's new strategy covers "green" energy flow, electric cars

Published 13/12/2017, 12:09 am
© Reuters.  UPDATE 1-Novatek's new strategy covers "green" energy flow, electric cars
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* Russian LNG producer eyes "climate change initiatives"

* Says to challenge Qatar, Australia, U.S. on LNG markets (Releads, adds quotes, details of the strategy)

By Oksana Kobzeva and Vladimir Soldatkin

MOSCOW, Dec 12 (Reuters) - Russia's largest private gas producer Novatek NVTK.MM on Tuesday announced a new strategy for the period to 2030 that took into account "green" energy and the emergence of electric cars, the company's CFO said.

Several carmakers have unveiled plans to mass-produce electric vehicles, spurred on by government crackdowns on engine emissions, falling battery costs and an increasing range of electric cars. ID:nL5N1LT47Z

Volkswagen VOWG_p.DE , Europe's largest carmaker by unit sales, will spend more than 34 billion euros ($40.03 billion) on electric cars, autonomous driving and new mobility services by the end of 2022. ID:nL8N1NN3IV

Novatek Chief financial officer Mark Gyetvay told an investor day presentation in Moscow on Tuesday that the firm has considered the role of natural gas in the future global energy balance amid such factors as "climate change initiatives, renewable energy sources and technological innovations".

"We also take into consideration the emergence of electric vehicles", he said.

LNG HUB

Novatek recently evolved from a Russian domestic gas market supplier to a global player after starting production at its liquefied natural gas plant, Yamal LNG, last week.

The firm has shipped the first cargo from the remote Arctic port of Sabetta with Petronas LNG UK Ltd (PLUK) as the buyer.

Novatek said on Tuesday it aimed to load up to 75 cargoes in 2018 with three going this month. ID:nL8N1O83IU .

Gyetvay said Novatek planned to invest from 2.2 to 2.8 trillion roubles in two LNG projects in the Arctic with total production of 270 million tonnes of LNG by 2030.

Its second LNG plant, known as Arctic LNG-2, will envisage three production units with 6.1 tonnes of super-cooled gas each per year. Gyetvay said two Arctic peninsulas, Gydan and Yamal, held deposits allowing output above 70 million LNG per year.

He said low costs for Yamal production allow the firm to compete successfully, bolstering Novatek's plan to establish the new LNG hub in the Arctic that would challenge rival producers in Qatar, Australia and the United States.

The bulk of costs are for transportation, which Novatek hopes to lower by setting up a transhipment point on the Far East peninsula of Kamchatka.

Novatek's presentations showed that average shipment costs to Asia via the Northern Sea route down through the Bering Strait that separates Russia from Alaska would vary from $1.65 to $1.84 per million British thermal units (mmBtu), a measure used to calculate LNG prices.

For cargoes going via the longer Western route passing by Europe to Asia, seen the main market for Yamal, transportation costs were estimated at $2.49 per mmBtu. ($1 = 0.8494 euros)

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