Suppliers
NOVATEK is committed to building strategic, long-term and mutually beneficial relations with its counterparties.
To build a sustainable supply chain, the Company approved the Supplier Code of Conduct, defining the Company’s expectations and recommendations regarding supplier compliance with the principles of the UN Global Compact, the International Labor Organization, the Declaration on Fundamental Principles and Rights at Work and applicable environmental, occupational health and industrial safety laws. Before signing a contract, the Company informs its counterparties about this Code and expects them to comply with it. Our contracts also include the OHS requirements for any supplier to comply with.
Key supplier identification and supplier assessment for risk exposure
A decision to invite suppliers to participate in procurement procedures is taken with due regard to their rating scores. Rating scores are calculated through an assessment of the supplier’s performance under contracts that are already signed with the Company against defined and established criteria, such as the quality and term of developing detailed engineering design documentation, comments on quality as appraised at incoming inspections and on operation, as well as the general level of engagement with the supplier. Based on the appraisal results, a reliability level defined by the rating scale is assigned, ranging from A (high reliability level) to D (critical reliability level). The ESG criteria are taken into account in the rating structure indirectly: the Company, with all else being equal, gives priority to a supplier who has no or minimal negative environmental and social impacts.
100% OF SUPPLIERS of the core process equipment passed the audit for compliance with environmental and social criteria as part of their qualification process in 2025.
Supplier evaluation system and providing equal opportunities in procurement
The Company has in place a qualification process to evaluate its counterparties before adding them to its pool of accredited suppliers. The qualification process comprises desk audits and onsite accreditation audits. If a potential or accredited supplier fails to meet NOVATEK’s requirements, the Company provides feedback, which the counterparty can use to close the gap within an agreed timeframe. This approach provides organizations excluded from the tender process with an opportunity to participate in future NOVATEK tenders.
NOVATEK also includes supplier questionnaires as part of desk audits of potential suppliers to assess what responsible business practices they have in place (including management of relevant risks). Candidate companies undergoing the accreditation process are required to complete a specialized questionnaire. NOVATEK uses questionnaire responses, along with other factors, to inform go/no-go decisions on business cooperation.
Key criteria for ESG assessment of suppliers as part of the accreditation and questionnaire procedures
Support for Russian manufacturers
NOVATEK continued maintaining its partnerships with Russian suppliers of process equipment for large-scale LNG projects in order to reduce reliance on foreign equipment suppliers. The Company has achieved significant success not only in engineering design but also in manufacturing engineering and in production of first article samples. Deliveries under contracts were enabled through prompt and productive communication between project teams, which helped to develop optimal technical and logistical solutions and prevented the use of non-conforming materials and components.
In the reporting year, the Company held regular meetings with both existing suppliers, to support their development and improve quality and efficiency, and potential suppliers, to explore opportunities for cooperation. The meetings included visits to the production sites of existing and prospective suppliers.
