Natural Gas Sales

During 2017, we supplied natural gas to 39 regions of the Russian Federation and accounted for 20% of the total natural gas deliveries to the domestic market via the UGSS.

 

NOVATEK sells natural gas within the Russian Federation as well as exports natural gas in the form of LNG. The Company started exporting LNG in December 2017 when the first train at Yamal LNG started production.  Relatively small LNG volumes are also sold through the Blue Gaz regas station acquired in December 2016.

NOVATEK plays an important role in ensuring supplies of natural gas to the domestic market. During 2017, the Company supplied natural gas to 39 regions of the Russian Federation. Our  end users and traders were located primarily in the following regions: the Chelyabinsk, the Khanty-Mansiysk Autonomous Region, Moscow and the city of Moscow, Lipezk, YNAO, Tyumen, Vologda, Stavropol, Smolensk, Nizhny Novgorod and Kostroma regions, Perm territory and the Republic of Tatarstan. The above regions accounted for more than 94% of our total gas sales.

The total volume of natural gas sales in 2017, including LNG, amounted to 65.0 bcm, increasing by 0.5% compared to the previous year due to a minor increase in sales volume within the Russian Federation as well as the commencement of LNG export sales. The proportional share of natural gas sales to the domestic end customers increased compared to 2016 and amounted to 94.9% of our total natural gas sales mix.

Revenues from natural gas sales in 2017 totaled RR 248 billion, representing a 7.8% increase compared to 2016. The revenue increase was mainly driven by growth in sales to end customers in Russia, the increase of Russian domestic regulated prices, as well as start of LNG deliveries.

Domestic Gas Deliveries