HomeNewsShell still taking LNG cargoes from Russia under Novatek contract

Shell still taking LNG cargoes from Russia under Novatek contract

2/2/2023

(Reuters) - Shell is still receiving cargoes of LNG from Russia under its long-term contract with Novatek, a Shell spokesperson said on Thursday.

The world's largest LNG trader agreed a more than 20-year deal in 2015 for Novatek to supply around 900,000 tpy from the Yamal LNG plant in Siberia.

Shell said in 2022 it would exit all its Russian operations, including a major LNG plant in the Sakhalin peninsula in the eastern flank of the country after Russia invaded Ukraine.

The energy giant said it would write down as much as $5 billion following its decision to exit Russia.

Other companies that exited their operations in Russia included BP and Norway's Equinor, while France's Total said would continue to ship LNG from Russia as long as there were no European sanctions on the fuel.

Although Europe has introduced widespread sanctions against Moscow, gas is not covered by them.

Russian gas exports to Europe via pipelines plummeted to a post-Soviet low in 2022, with Europe accusing Russia of restricting supplies and Moscow blaming the impact of sanctions. A major pipeline was also damaged by mysterious blasts.

However, Russia supplied Europe with some 17 MMt of LNG in 2022, up about 20% from 2021, Refinitiv Eikon data show.

Novatek, Russia's largest LNG producer, provided most of the supplies, having shipped 20.8 million tonnes from the Yamal LNG project - including to other customers - and 700,000 tons from Kriogaz-Vysotsk on the Baltic Sea, according to Refinitiv Eikon.

On Thursday, Shell said it made a record $40 B profit in 2022, capping a tumultuous year in which a surge in energy prices allowed it to hand shareholders unprecedented returns.

(Reporting by Ron Bousso and Marwa Rashad Editing by David Goodman and Mark Potter)

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