* Energy Ministry mulling LNG exception to export monopoly
* Novatek asking for Yamal LNG export rights
* Yamal key to developing new gas strategy in Russia
* Putin told Novatek to work with Gazprom Export on Yamal
(Adds context, quotes, writes through)
By Denis Pinchuk and Melissa Akin
MOSCOW, Nov 20 The Energy Ministry may make an
exception to Gazprom's monopoly on gas exports for an
independent liquefied natural gas project that could help break
Russia's dependence on Europe's declining market for its
"In theory there are possible options specifically for LNG,"
Energy Minister Alexander Novak told reporters. "What form to
use and what system of agreements with Gazprom Export and others
- it would need to be developed specifically."
Gazprom's monopoly is protected by law. But a chronic
refusal to acknowledge the impact of the U.S. shale boom on
world gas markets and slipping market have brought a hailstorm
of criticism on the state company and prompted questions about
its continued lock on exports.
Lined up behind it are Russia's "independent", or
non-Gazprom gas producers who have substantial reserves which
can be monetised only through sale to Gazprom or to domestic
Chief among them is Novatek, whose influential
co-owner Gennady Timchenko called for export rights for the No.2
Russian gas producer in a recent interview with the Russian
edition of Forbes magazine.
Timchenko built one of the biggest business empires in
Russia during Putin's 12-year rule and the Russian opposition
says his success was due to close ties with the leader,
something Timchenko and Putin have both denied.
Novatek has asked for an exception to the export
monopoly for its Yamal LNG project, which has France's Total
as a 20 percent shareholding.
Putin has urged Novatek to push ahead with the project, the
most advanced of half a dozen projects to liquefy Russia's vast
gas reserves, but stopped short of agreeing to an exemption from
The Kremlin, concerned about declining markets in Europe, a
key source of revenues for Gazprom and therefore for the Russian
budget, wants to shift Russia's gas strategy toward LNG.
FOUR TRILLION CUBIC METRES
Underlining the extent of Russia's exposure to Europe, where
weak economies and rising competition are eating into Gazprom's
share, Gazprom Export chief Alexander Medvedev said the monopoly
had supply contracts for 4 trillion cubic metres.
While rival producer Statoil says it is now
selling around half its sales on spot terms as it slowly changes
its pricing structure, Gazprom has long insisted
it will not sacrifice its long-term contract structure or bow to
pressure for spot pricing.
"We will defend our system of long-term contracts with all
our energy," Medvedev said.
Yamal LNG output is earmarked for Asian markets, which are
to be the focus of a new gas strategy ordered by Putin to
counter declines in Europe.
But the Russian president appears loath to sacrifice
Gazprom's monopoly to get a much-desired LNG project off the
ground, and on Monday he told Novatek Chief Executive Leonid
Mikhelson to work with Gazprom to sell Yamal LNG's output.
Putin noted Novatek would need export contracts to secure
financing for the project.
Novak did not comment on Putin's remarks, nor did he specify
whether the law would require amendments in order for Novatek to
ship LNG independently.
He said the ministry would rule by the end of the year on
whether Novatek, which has requested rights to handle its own
exports from its Yamal LNG project, can export LNG independently
(Writing by Lidia Kelly; Editing by Mark Potter and David