NOVATEK to Deliver LNG to China

October 23, 2013

NOVATEK announced on October 22 the conclusion of Heads of Agreement for the supply of liquefied natural gas (LNG) between Yamal LNG and China National Petroleum Corporation (“CNPC”). The document provides for the supply of no less than three million tons of LNG per annum at delivered ex-ship (DES) terms for a period of 15 years with possible supply extension, with the LNG price is indexed to the Japanese Crude Cocktail.

Chairman of the Management Board of NOVATEK, Leonid V. Mikhelson stated “We welcome the achievement of a mutually beneficial agreement on LNG supplies to the fast growing Chinese market”.

Yamal LNG project envisages the construction of an LNG plant with annual capacity of 16.5 million tons per annum based on the feedstock resources of the South-Tambeyskoye field. According to the PRMS reserve standards, the proven and probable reserves of the South-Tambeyskoye field as of 31 December 2012 were appraised at 907 billion cubic meters of natural gas.

Source: NOVATEK Press Office, 2013