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Novatek's H1 hydrocarbons output up 2.4% on year to 1.46 mil boe/d

Moscow — Russian independent gas producer Novatek said Wednesday its hydrocarbons output rose 2.4% on the year in the first half of 2018 to reach 1.46 million b/d of oil equivalent.

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The company's output included 32.93 Bcm of natural gas -- a 3.2% rise in production compared to H1 2017, according to preliminary operating data.

Novatek's gas output is rising on the launch of the first 5.5 million mt/year train at its Yamal LNG plant in the Arctic in December last year. It accelerated production at adjacent gas fields to provide feedstock for the plant. This trend is likely to continue as the second train comes on stream at the end of this year, with a third train following in 2019.

Novatek's liquids output fell 0.4% to 5.864 million mt, or around 237,475 b/d in the first half of the year according to the results.

This indicates that the liquids output decline rate continues to slow, as higher gas production boosts condensate output, following the launch of the company's first LNG plant late last year.

In the longer term Novatek expects to reverse this decline and significantly ramp up hydrocarbons production. It plans to double gas production to 126 Bcm/year and increase liquids output by 55% to over 360,000 b/d within the next 13 years, according to a strategy paper published late last year.

Preliminary natural gas sales volumes, including LNG, rose 6.9% year-on-year to 35.42 Bcm in H1 and LNG sales volumes on international markets in the period totaled 1.61 Bcm.

Processing of unstable gas condensate at the company's Purovsky plant aggregated 5.549 million mt of unstable gas condensate. Novatek also processed 3.547 million mt of stable gas condensate at its Ust-Luga complex.

Preliminary petroleum product sales volumes in H1 aggregated 3.594 million mt, including 2.260 million mt of naphtha, 544,000 mt of jet fuel, and 790,000 mt of fuel oil and gasoil.

As of June 30, Novatek had 1.2 Bcm of natural gas and 594,000 mt of stable gas condensate and petroleum products in storage or transit and recognized as inventory.

-- Rosemary Griffin, rosemary.griffin@spglobal.com

-- Edited by Jeremy Lovell, jeremy.lovell@spglobal.com