Novatek Sees Revenue Rise, Russia

Russia’s Novatek, operator of the Yamal LNG project, said its total revenues in the third quarter and nine months 2013 increased by 44.1% and 41.4%, respectively, as compared to the corresponding periods of 2012, largely due to an increase in sales volumes and average sales prices of natural gas and liquid hydrocarbons.

The increase in natural gas prices was due to a significant expansion of the share of end-users in the company’s total gas volumes sales mix, changes in the geography of sales in favor of the remote regions, as well as due to an increase in regulated gas prices, whereas the increase in the average price of liquids was mainly due to the start of product sales from the Ust-Luga Gas Condensate Fractionation and Transshipment Complex launched in the second quarter 2013.

In the third quarter 2013, Novatek recorded a year-on-year increase of 30.3% in EBITDA, which totaled RR 32.9 billion. EBITDA for the first nine months 2013 increased by 24.6% over the corresponding nine months in 2012, and totaled RR 87.1 billion. The growth in the company’s EBITDA was positively impacted by the expansion of the share of liquids in Novatek’s total hydrocarbon volumes sales mix, as well as by the margin from stable gas condensate processing at the Ust-Luga complex.

Profit attributable to shareholders of  Novatek in the third quarter 2013 increased to RR 23.5 billion (RR 7.75 per share), or by 17.3% as compared to the third quarter 2012. Profit attributable to shareholders of Novatek in the first nine months 2013 increased to RR 57.9 billion (RR 19.10 per share), or by 13.7% as compared to the same period of 2012. The dynamics of profit was impacted by non-cash foreign exchange effect.

In the third quarter and first nine months 2013, the company’s natural gas sales volumes increased by 6.6% and 11.1%, respectively, as compared to the corresponding periods in 2012, due to growth in production at the Yurkharovskoye field and an increase in purchases of natural gas. At 30 September 2013, the company recorded 2,362 million cubic meters of natural gas as inventory in underground storages as compared to 1,309 million cubic meters in the corresponding period of 2012.

In the third quarter and first nine months 2013, Novatek’s total liquid hydrocarbon sales volumes increased by 27.0% and 28.5%, respectively, as compared to the corresponding periods in 2012. The growth was due to higher volumes of gas condensate purchases from joint ventures and an increase in crude oil and gas condensate production by the company’s subsidiaries. At 30 September 2013, 378 thousand tons of stable gas condensate and oil products were in transit or storage and recognized as inventory, as compared with 268 thousand tons of stable gas condensate as at 30 September 2012.

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LNG World News Staff, November 6, 2013; Image: Novatek