Novatek Acquires 49% Stake in Nortgas

Novatek, Russia’s largest independent gas producer, is to acquire a 49% equity stake in Nortgas  from R.E.D.I. HOLDINGS for $1.4 billion (€1.1bn).

The transaction will complete by the end of this year. Nortgas holds the hydrocarbon production license for the Severo-Urengoyskoye field, located in the Nadym-Pur-Taz and Purovskiy regions of the Yamal-Nenets Autonomous District. These are close to Novatek’s existing production, transportation and processing infrastructure.

Petroleum firm DeGolyer & MacNaughton says PRMS proved reserves of Nortgas as of December 31 2011 were appraised at 1.7 billion barrels of oil equivalent, of which over 13% are classified as liquid hydrocarbons. 

Commercial production at the Western dome commenced in 2001, and it is estimated that the production launch at the Eastern dome will more than double the field’s natural gas output and triple the output of gas condensate.

Novatek’s chairman of the management board, Leonid Mikhelson, said: "The ability to acquire a significant asset such as Nortgas is consistent with our overall strategy to expand our reserve base and raise our production profile in our core region of operations. We expect significant synergies due to Severo-Urengoyskoye field’s close proximity to our existing assets and infrastructure, which will primarily result in additional returns from processing gas condensate at our Purovsky Plant and the Ust-Luga complex."