Novatek Gas

completed

Independent Russian gas producer OAO Novatek (the sponsor) has requested IFC assistance in the staged expansion of a large natural gas and condensate field in the Yamalo-Nenets Autonomous Region of Russia’s Arctic Circle. The Yurkharov Gas Field is operated by OOO Yurkharovneftegaz (YNG or the company), a wholly owned subsidiary of OAO Novatek. Discovered in 1970 by a Gazprom-affiliated exploration company of the Soviet era, the field was deemed too small for Gazprom’s development threshold. OOO Yurkharovneftegas was formed in July 1998, and YNG’s existing ownership structure was put in place in October 1999. Production at YNG commenced in January 2003 with 3.115 bcm of gas produced that year. Gas production is expected to reach 9 bcm/y by the end of 2006. YNG operates the Yurkharovskoe field (approximately 200 sq. km.), which has 208 billion cubic meters (bcm) (7.4 trillion cubic feet (tcf)) of gas and 106 million barrels (mmbbls) of condensate. The IFC-funded project is to increase YNG’s production of gas to 9 bcm/y (Phase I). Two subsequent phases will increase production to 18 bcm/y and to 27 bcm/y. The company’s production will be transported through the region’s extensive gas and liquids infrastructure to industrial consumers and gas traders in the domestic market.