Northgas Explained

ZAO Northgas (ru|ЗАО Нортгаз) is a natural gas-producing company in Russia. It is a developer of the North-Urengoy (Severo-Urengoyskoye) gas field in the Yamalo-Nenets region. According to DeGolyer and MacNaughton, it controls a total reserves of 368 billion cubic metres of natural gas. All produced gas is acquired by Gazprom.^[1]

History

Northgas was founded in 1993 to develop the North-Urengoy field.^[2] The company was controlled by Gazprom through its subsidiary Urengoygazprom, which owned a 51% stake in Northgas.^[3] 44% of the company was owned by Bechtel Energy, while Tansley, an offshore company owned by the Azerbaijani businessman Farkhad Akhmedov had a stake of 5%.^[4] A license for the North-Urengoy field was transferred from Urengoygazprom to Northgas in 1994.^[5] In 1996, Bechtel sold its stake to Akhmedov-owned Farcot Group, which later also took over a stake owned by Transley. In 1999–2001, Farkhad Akhmedov gained full control over Northgas through the three emissions of additional shares and signing-off the existing share capital.^[4] Its ownership was transferred to the holding company REDI.^{[2] [6]}

Northgas started natural gas production in 2001. However, due to a dispute with Gazprom, the access of produced gas to the gas transportation system of Russia was limited and the Northgas license of the North-Urengoy field was annulled. In 2005, the dispute was resolved by Gazprom acquiring a 51% stake in Northgas free of charge.^{[5] [7] [8]} Gazprom owns its stake through Urengoygazprom.^{[8] [9]}

A new dispute between the Farkhad Akhmedov's holding company REDI and Gazprom arose in 2008 over a gas price and access to the gas transportation system.^[1]

In January 2011, a Russian power producer Inter RAO announced that it will acquire REDI, which holds 49% take in Northgas for US$1.5 billion. Inter RAO made similar offer to Gazprom to acquire a full control of the company.^[10] However, this transaction was not completed. In 2012, the stake owned by REDI was acquired by Novatek for $1.4 billion.^{[4] [11]} In 2013, Gazprom transferred additional 1% of shares to Novatek and two companies became equal partners.^[12]

Notes and References

1. News: Northgas in conflict with Gazprom over Urengoy and transit . Roman . Kazmin . ICIS Heren . 2008-08-01 . 2011-02-19 . dead . https://web.archive.org/web/20210727203314/https://www.icis.com/explore/resources/news/2008/08/01/9305742/northgas-in-conflict-with-gazprom-over-urengoy-and-transit . 2021-07-27.
2. News: "Нортгаз" остановит производство . Northgas stops production . . 2003-01-20 . 2021-07-31 . Russian.
3. News: Ruhrgas sounds out possibilities with Russian independents . ICIS Heren . 2004-05-28 . 2011-02-19 . dead . https://web.archive.org/web/20210727185213/https://www.icis.com/explore/resources/news/2004/05/28/9276929/ruhrgas-sounds-out-possibilities-with-russian-independents.html . 2021-07-27.
4. News: "Газпром" разделит "Нортгаз" с главным конкурентом . Gazprom splits Northgas with its main competitor . Timofey . Dzyadko . . 2012-11-07 . 2021-07-31 . Russian.
5. News: Focus on Gazprom production . ICIS Heren . 2006-03-15 . 2011-02-19 . dead . https://web.archive.org/web/20210727212627/https://www.icis.com/explore/resources/news/2007/07/17/9297655/focus-on-gazprom-production . 2021-07-27.
6. News: "Газпром" не оценил "Нортгаз" . Gazprom did not appreciate Northgas . Natalya . Grib . . 2004-08-30 . 2021-07-31 . Russian.
7. News: Gazprom ends Northgas face off . Alcira . Molina . . NHST Media Group . subscription . 2005-06-10 . 2011-02-19.
8. News: "Нортгаз" вошел в "Газпром" по-английски . Northgas went to Gazprom according to the British law . Natalya . Grib . Dmitry . Butrin . . 2005-06-14 . 2021-07-31 . Russian.
9. News: http://www.rg.ru/2005/08/01/fas-gazprom-anons.html . ru:ФАС запросила у Газпрома информацию о консолидации Нортгаза . . Russian . FAS has asked Gazprom about consolidation Northgas . 2005-08-01 . 2011-02-19.
10. News: Northgas stake seller sees $1.5 bln Inter RAO bid . https://web.archive.org/web/20160306101526/http://uk.reuters.com/article/interrao-idUKLDE66F0AP20110117 . dead . March 6, 2016 . Anastasia . Lyrchikova . . 2011-01-17 . 2011-02-19.
11. News: Фархад Ахмедов сдает "Нортгаз" . Farkhad Akhmedov hands over Northgas . Olga . Mordyushenko . . 2012-11-07 . 2021-07-31 . Russian.
12. News: НОВАТЭК получил паритет в "Нортгазе" . Novatek gains parity in Northgas . Mikhail . Serov . Anna . Solodovnikova . . 2013-02-27 . 2021-07-31 . Russian.