Russia has offered Indian oil companies a stake in the second phase of Yamal LNG, the biggest project to produce liquefied natural gas in the Arctic. The offer of stake in JSC Yamal LNG was made when Oil Minister Dharmendra Pradhan visited St. Petersburg last month, sources privy to the development said. Petronet LNG, India's biggest natural gas importer, is studying the offer, they said adding other state-owned firms like Indian Oil Corp (IOC) may join in later. Novatek OJSC, Russia's second-biggest natural gas producer, had in 2013 offered a 9 per cent stake in the USD 27 billion Phase-I of Yamal LNG project to a consortium of Petronet, IOC and ONGC Videsh Ltd. But later, OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), did not find the offer attractive and the Indian consortium backed off. Novatek stitched a consortium with CNPC of China (20 per cent), Total of France (20 per cent) and China's Silk Road Fund (9.9 per cent). The Russian firm holds 50.1 per cent stake in the project that comprises development of the South-Tambeyskoye field with proven deposits of 1.3 trillion cubic meters of natural gas and the construction of natural gas liquefaction plant (LNG) for producing 16.5 million tonnes of LNG a year by 2017. Now the company is planning a second phase and is offering a stake to Indian firms, sources said. Sources said OVL was previously interested in getting into the upstream part of the project, i.e gas field development. Petronet was keen to offtake LNG. OVL, they said, may envisage interest if the stake is accompanied by some say in upstream part. OVL-IOC-Petronet were originally interested in taking up to 15 per cent stake in Yamal project, which also requires construction of an airport and port on the Arctic Ocean.
But a smaller 9 per cent stake was offered to them after Novatek in September 2013 sold a 20 per cent stake in the project to CNPC. Total SA had in March 2011 bought 12 per cent stake in the project for about $4 billion. Since then, it has raised the stake to 20 per cent. Sources said Petronet, which operates two LNG import facilities in Gujarat and Kerala, has been offered the stake in the phase-II as it offers a ready buyer of gas. In Petronet, Russia seeks a buyer who can take at least 5 million tonnes a year of LNG from the Arctic project. CNPC had pledged to purchase at least 3 million tonnes a year of LNG from the phase-I of Yamal project.