Raw materials base in Yakutia will boost competition in the gas domestic market

18 october 2016 | "Kompaniya"

Russia’s largest independent natural gas producer Novatek plans to radically expand the regions it operates in by exploring new natural gas deposits in Yakutia.

Alexander Kurdin
Alexander Kurdin
Department for Fuel and Energy Sector

Analytical Center expert Alexander Kurdin told the Kompaniya correspondent 4 reasons why Yakutia is so important to Novatek. 

“First of all, as work continues on the construction of the Power of Siberia pipeline, new infrastructure facilities are being created there and the local natural gas transport systems cease to be isolated. Second, there are large-scale plans for the development of the Far East and their implementation is bound to boost domestic demand for energy and fuels. Third, it is possible that over time a single export channel could be created that would allow having the natural gas produced in Yakutia by various companies exported via pipeline to China through a single operator, although the gas producing companies would not be exporting the gas themselves. Fourth, unlike Gazprom and Rosneft, Novatek currently has no operations in the region,” the expert said. 

“If Novatek finds enough raw materials there and gets access to the infrastructure, there will be more chances for competition to develop in that region, at least in the domestic market,” Mr. Kurdin believes.

But it is not just the natural tendency of any business to expand that is behind the decision, according to experts. Exploring Yakutia’s rich natural gas deposits is going to allow Novatek not only to expand production and revenue (if they manage to find buyers for the gas they produce), but to achieve the goal of retaining a 20% share in the domestic market. And in terms of strategy it is plain to see that the company is getting ready for its main deposits in Yamal running dry in the near future.