New mega projects currently built in Russia that would be insulated from any new U.S. sanctions were pointed out as the main reason for the assessment.
According to Novatek’s Chief Financial Officer Mark Gyetvay, the company would build all equipment and technology in Russia to protect itself.
“We will not hold ourselves hostage to U.S. sanctions,” he told the IP Week conference in London.
He said Novatek was able to deliver LNG to Europe for $3.15 per million British thermal units (mmBtu) comparing with $7-$8 for U.S. producers.
“Russian gas will be very competitive versus the U.S. Gulf coast,” he said.
Gyetvay said Novatek was extracting gas at a cost of 10 cents per mmBtu versus $3 in the United States, and liquefying gas for 50 cents versus $3 in America.
U.S. energy companies are flooding Europe with natural gas, establishing a foothold in a market dominated by Russia and seen as a key battleground in Washington’s efforts to curb Moscow’s energy influence.
Washington is considering new sanctions that could put further strain on Russia’s economy and companies. So far, there have been no sanctions affecting conventional or liquefied natural gas (LNG) production in Russia.