Engie SA

The company will receive gas from Yamal LNG, is ready to invest in the expansion of the Sakhalin plant and may join the Novatek project in Gydan.

Shell will increase the share of liquefied natural gas (LNG) from Russia in their portfolio. The company has entered into a 20-year contract with Novatek for the purchase of 0.9 million t of LNG per year from Yamal LNG, Novatek reports. Shell also wants to increase production of liquefied gas in Russia. The company owns 27.5% of the LNG plant Sakhalin Energy (50% is owned by Gazprom), with capacity of 10 million tons per year.

Russian Minister of Energy Alexander Novak, who met with the CEO of Shell Ben van Buerden in Vienna, announced on Wednesday that Shell is ready to use company resources to invest in the expansion of the plant. According to Gazprom estimates, the third stage construction project will cost $7.4 billion.

On Thursday, van Buerden said that the investment decision regarding the project will be made in Q3 2015.

Shell may also be included in new Novatek projects. New projects are also a possibility with Total, including projects abroad, he said.

Co-owner of Novatek Gennady Timchenko mentioned Shell’s interest in new LNG projects in November of last year. He also mentioned that French and Chinese companies are interested as well. On Wednesday, Novatek announced that the company has signed a contract with the French company Engie (earlier GDF Suez) for the delivery of 1 mln t of LNG from Yamal LNG. Engie’s Executive Vice-President Jean-Marie Dauger said on Thursday that he is not excluding the possibility of participating in the Gydan project, but there are no concrete plans yet (reported by Interfax).

Novatek is also looking to sell a 9% stake in Yamal LNG. Jean-Marie Dauger says that is Engie was initially interested in the offer and is still considering it. But “for us, this is too big of a project. Yes, we are investing in projects, but not projects this big. We purchase small stakes – we are not financial investors,” he said

Shell is looking to strengthen its position as the largest producer and supplier of liquefied gas, including through its merger with BG Group, says Sberbank CIB analyst Valery Nesterov. Shell is a global leader in the LNG sector and Russia is incredibly important to the company, said Vice President of LNG Trading David Wells on Thursday.

Shell is the only company in the world that has experience in LNG production in Russia. The company is connecting its future with gas resources in the Arctic, is counting on increases in LNG consumption and wants to be a leader in this segment, Nesterov says.

03 June 2015

Investor profile

Engie SA


Company's website: https://www.gdfsuez.com/en

Public company

Contact: Gérard Mestrallet, President and CEO

ENGIE is a participant in the global LNG market and is the chief importer to LNG to Europe. Deliveries are made from six countries in the amount of 16.4 mln t of LNG per year. According to this indicator, ENGIE ranks third in the world. The company manages a fleet of 14 LNG tankers under medium and long-term charter agreements. The group also owns regasification facilities in various countries.