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NOVATEK is Russia's largest gas producer that is not part of the state gas monopoly. Its main distinguishing feature is its bet on liquefied natural gas: the gas is cooled to a liquid state and carried by tanker rather than by pipeline, which makes it possible to sell it in any market in the world. The shares trade on the Moscow Exchange under the ticker NVTK.
The company produces gas and liquid hydrocarbons on the Yamal Peninsula and in Western Siberia. The key difference from the pipeline model is that liquefied gas is not tied to the direction of a pipe. A tanker sails to wherever the price is higher today — and this makes revenue sensitive to global prices rather than to the terms of a single contract.
The second source of income is the processing of gas condensate into naphtha and other products, which are sold separately and at their own prices.
The company builds its large projects in partnership with foreign participants and finances them with project debt. This leads to an important detail in the financial statements: a significant part of profit comes in as shares in joint ventures rather than directly from sales.
Fields in the Yamal-Nenets district, including large assets on the Yamal Peninsula.
Plants producing liquefied natural gas and marine logistics with an ice-class fleet.
Processing of gas condensate into naphtha and other products.
Gas supplies to the domestic market and exports of liquefied gas.
Strengths and weaknesses describe the business itself. Opportunities and threats describe what may happen around it.
The company produces natural gas and gas condensate, processes them and makes liquefied natural gas, which is shipped by tanker for export. Part of the gas is supplied to Russian consumers.
The gas is cooled to roughly minus 162 degrees, and it turns into a liquid, taking up hundreds of times less volume. In this form it can be carried by tanker to places where no pipeline has been laid — that is, sold in any market in the world.
Gazprom is a state company that owns the trunk gas transmission network and exports gas primarily by pipeline. NOVATEK is an independent producer that has bet on liquefied gas and delivery by sea, and it has no access to pipeline exports.