Total to get 12 percent stake in Russia's Novatek for $4 bn

3rd March 2011, Comments 0 comments

French energy giant Total has entered a "strategic partnership" with Russia's Novatek, paying $4 billion (2.9 billion euros) for a 12 percent stake in the gas firm, the company said Wednesday.

The stake is to rise to 19.4 percent in three years, it said in a statement, adding that Total would be represented on Novatek's board of directors.

The accord, reached during a visit to Moscow by Total chief Christophe de Margerie, also gives Total a 20 percent share of the Yamal liquefied natural gas (LNG) gas project in the Arctic, Total said.

Total will acquire the 12 percent stake in Novatek, Russia's largest independent gas producer, from its "two main shareholders based on stock market quotations," the statement said.

The transaction is expected to be completed by April, it added.

"Through this acquisition, the group will have access to an equity production of 120,000 boe (barrels of oil equivalent) per day and to proven and probable reserves of about one billion boe," it said.

The Yamal project will develop the South Tambey condensate and gas field to allow production of more than 15 million tonnes of LNG per year, the statement said.

The Yamal Peninsula, a vast stretch above the Arctic Circle, is considered one of the planet's richest sources of hydrocarbons.

Russia wants to make Yamal one of its main production centres for LNG, and its development is a key project of the state-owned giant Gazprom.

Total and Novatek have been jointly developing the peninsula's Termokarstovoye field since 2009.

© 2011 AFP

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