China expands in Russian LNG with Yatek stake buy

MOSCOW, Jan 19 (Reuters) – Zhejiang Energy will buy a 10% stake in a liquefied natural gas project in Russia for 500 million euros ($567 million), a Russian firm said, confirming China’s status as the world’s biggest LNG buyer and its deepening energy ties with Moscow.

A-Property, a Russian private company, will develop and run the Yatek project to produce up to 18 million tonnes of LNG per year in Russia’s far east, it said in a statement on Wednesday.

The statement added that Zhejiang Energy will market the gas in China, where LNG imports jumped by 18% last year making China the world’s top buyer. read more

The deal includes a 10% stake in Globaltek, which provides technical solutions for Yatek, which aims to put the first LNG cargo onstream in 2027.

To export LNG from Russia, which wants to produce over 100 million tonnes of the super-chilled gas annually by 2030, a company must either get a governmental licence or seal a deal with the state company Gazprom .

Yatek told Reuters in emailed comments it was working on the options for exports but declined to give details. The Russian energy ministry and Gazprom did not reply to requests for a comment.

Wednesday’s deal, which is set to close in October, adds to a flurry of announcements this month.

Russia’s top private gas producer Novatek (NVTK.MM) said that Zhejiang Energy was buying up to 1 million tonnes of LNG per annum from the Arctic LNG 2 project run by Novatek, for 15 years.

Another LNG receiving terminal in China, Zhoushan, will get 0.6 million tonnes of LNG from the Arctic LNG 2 for 11 years after Novatek signed a similar deal with ENN Energy (2688.HK).

Companies from China, already the largest single Russian oil importer, have stakes and off-take deals in Novatek’s exiting Yamal LNG plant and the Arctic LNG 2, to be launched next year. They also buy gas from the Gazprom-led Sakhalin-2 project.

($1 = 0.8821 euros)

Reporting by Anastasia Lyrchikova, Oksana Kobzeva, Olesya Astakhova, Vladimir Soldatkin and Anton Kolodyazhnyy
Writing by Katya Golubkova; Editing by Christopher Cushing and Barbara Lewis

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