Natural gas sales of Russian gas producer and LNG exporter Novatek dropped in the second quarter and first half of this year compared to the year-ago periods, the company said in a preliminary operations report on Monday.
Preliminary data on total natural gas sales volumes, including LNG volumes sold, fell by 2.6% year-on-year to 17.83 billion cubic meters (bcm) in the second quarter of 2024. First-half sales dropped by 3.3% and stood at 39.30 bcm, Novatek said in a press release.
However, the company's oil and gas production rose by 2.7% in the first half of 2024 compared to the same period of 2023. Both natural gas and liquids output grew, by 1.2% and 11.9%, respectively.
While Novatek is boosting domestic production, it has been seeking new markets for its gas after Western sanctions stalled its new project Arctic LNG.
Novatek is offering LNG to potential Chinese customers through a new marketing team, although it's uncertain whether the Russian company would attract many clients with attractive prices, Chinese traders told Reuters last week.
Traders doubt the Russian company would see profitable margins from LNG trade in China, where pipeline gas supply from Russia is growing, while major LNG importers own shares in the import infrastructure.
Novatek doesn't have any foothold in China's import terminals or gas distribution network.
Unlike the Yamal project which sells LNG cargoes to Asia and even to Europe, Novatek's new Arctic LNG 2 project has been basically on ice since the U.S. imposed in November fresh sanctions on the Russian project.
The Arctic LNG 2 project was considered key to Russia's efforts to boost its global LNG market share from 8% to 20% by 2030-2035.
However, foreign shareholders suspended participation in the Arctic LNG 2 project after the Biden Administration announced the new sanctions, effectively withdrawing from the financing of the project and for offtake contracts for the new plant.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, More