Northgas

Northgas is a Russian natural-gas-producing company established in 1993 to develop the North-Urengoy, also known as Severo-Urengoyskoye, gas field in the Yamalo-Nenets region of northern Russia. The company is focused on upstream gas production rather than consumer-facing energy services or a broad portfolio of branded products. Its operations are tied to one major producing asset and to the Russian gas transportation and distribution system. Northgas was initially structured with Gazprom control through its Urengoygazprom subsidiary, which held 51% of the company. Bechtel Energy held 44%, while the remaining 5% was associated with an offshore company connected to Azerbaijani businessman Farkhad Akhmedov. The license for the North-Urengoy field was transferred from Urengoygazprom to Northgas in 1994. Bechtel sold its interest in 1996 to the Farcot Group, which was associated with Akhmedov and subsequently also took over the stake connected with Transley. Between 1999 and 2001, Akhmedov consolidated control of Northgas through additional share issues and changes to the existing share capital. Ownership was placed in the REDI holding company. Northgas began producing natural gas in 2001, but a commercial and infrastructure dispute with Gazprom restricted access to Russia's gas transportation system. The conflict contributed to the annulment of the North-Urengoy field license. In 2005, the dispute was settled when Gazprom acquired a 51% interest in Northgas without payment, holding it through Urengoygazprom. The company's relationship with its minority shareholder REDI remained contentious. A further dispute emerged in 2008 concerning gas pricing and access to the Russian transportation network. In 2011, Inter RAO announced plans to acquire REDI, including its 49% Northgas stake, for approximately US$1.5 billion and indicated interest in acquiring full control. That transaction was not completed. Novatek later acquired REDI's interest in 2012 for a reported US$1.4 billion. In 2013, Gazprom transferred an additional 1% of Northgas to Novatek, leaving Gazprom and Novatek as equal partners. According to reserve estimates attributed to DeGolyer and MacNaughton, Northgas controls approximately 368 billion cubic metres of natural-gas reserves. All gas produced by the company is acquired by Gazprom, making Gazprom both a major shareholder and the company's principal gas buyer. Northgas therefore occupies a specialized position within Russia's gas industry: it is an upstream field developer and producer whose commercial access and offtake arrangements are closely connected to the country's dominant gas network operator.

Northgas was founded in 1993 to develop the North-Urengoy gas field in the Yamalo-Nenets region of Russia. The company's original ownership structure gave Gazprom control through its subsidiary Urengoygazprom, which held 51%. Bechtel Energy owned 44%, and a further 5% was held through an offshore company associated with Azerbaijani businessman Farkhad Akhmedov. In 1994, the license for the North-Urengoy field moved from Urengoygazprom to Northgas. Bechtel sold its stake in 1996 to the Farcot Group, an Akhmedov-associated holding company. Farcot later also took over the interest connected with Transley. From 1999 to 2001, Akhmedov consolidated control through three additional share issues and the signing-off of the existing share capital. The resulting ownership was transferred to REDI. Northgas began producing natural gas in 2001. Its commercial development was complicated by a dispute with Gazprom over access to Russia's gas transportation system. The restricted access affected the company's ability to market its production, and the license for the North-Urengoy field was annulled during the dispute. The matter was resolved in 2005 when Gazprom acquired a 51% interest in Northgas without payment, with the stake held through Urengoygazprom. Relations between Gazprom and REDI later became disputed again. In 2008, the shareholders were involved in a disagreement concerning gas prices and access to the national gas transportation network. In January 2011, Inter RAO announced an intention to acquire REDI, including its 49% Northgas stake, for approximately US$1.5 billion. Inter RAO also made an offer to Gazprom for full control, but the proposed transaction was not completed. In 2012, Novatek acquired REDI's 49% interest for a reported US$1.4 billion. In 2013, Gazprom transferred an additional 1% of Northgas to Novatek, leaving the two Russian gas companies with equal stakes. Northgas's production is acquired by Gazprom. Reserve estimates attributed to DeGolyer and MacNaughton place the company's controlled natural-gas reserves at approximately 368 billion cubic metres. The available reference material does not identify a separate consumer brand, broad international operating footprint, or publicly listed securities for Northgas.

• 2013

  Gazprom and Novatek become equal owners

  [1]Northgasen.wikipedia.org

  Gazprom transfers an additional 1% stake to Novatek, producing equal ownership between the two companies.

• 2012

  Novatek acquires REDI's stake

  [1]Northgasen.wikipedia.org

  Novatek purchases REDI's 49% interest in Northgas.

• 2005

  Gazprom reacquires majority control

  [1]Northgasen.wikipedia.org

  Gazprom obtains a 51% stake in Northgas as part of the resolution of the company's gas-access and licensing dispute.

• 2001

  Commercial gas production begins

  [1]Northgasen.wikipedia.org

  Northgas starts producing natural gas from the North-Urengoy field.

• 1996

  Bechtel sells its Northgas stake

  [1]Northgasen.wikipedia.org

  Bechtel Energy sells its interest to the Akhmedov-associated Farcot Group.

• 1994

  North-Urengoy field license is transferred to Northgas

  [1]Northgasen.wikipedia.org

  The field license moves from Gazprom's Urengoygazprom subsidiary to Northgas.

• 1993

  Northgas is founded

  [1]Northgasen.wikipedia.org

  The company is established to develop the North-Urengoy gas field in the Yamalo-Nenets region.

A specialized Russian upstream natural-gas producer centered on the North-Urengoy field and integrated into Gazprom's gas purchasing and transportation system.

• Upstream natural-gas production · 2001

  Natural gas

  Northgas produces natural gas from the North-Urengoy, or Severo-Urengoyskoye, gas field in the Yamalo-Nenets region. The company is primarily an upstream producer rather than a downstream retail or energy-services brand. According to reserve estimates attributed to DeGolyer and MacNaughton, Northgas controls approximately 368 billion cubic metres of natural-gas reserves. The produced gas is acquired by Gazprom.

• 2013

  Ownership is rebalanced between Gazprom and NovatekM&A

  Background

  After Novatek acquired REDI's 49% stake, Gazprom remained the majority shareholder.

  Action taken

  Gazprom transferred an additional 1% of Northgas to Novatek.

  Aftermath

  Gazprom and Novatek became equal partners in Northgas.

  Source

• 2012

  Novatek purchases REDI's Northgas stakeM&A

  Background

  REDI held the 49% interest that had been associated with Farkhad Akhmedov's holding structure. An earlier proposed acquisition by Inter RAO was not completed.

  Action taken

  Novatek acquired the 49% stake for a reported US$1.4 billion.

  Aftermath

  Novatek became Northgas's minority partner alongside Gazprom and later received an additional 1% from Gazprom.

  Reported acquisition value. (2012)

  Source

• 2005

  Resolve the Gazprom access and licensing dispute through a majority-stake transferStrategy

  Background

  Northgas faced restricted access to Russia's gas transportation system and the annulment of its North-Urengoy license during a dispute with Gazprom.

  Action taken

  Gazprom acquired a 51% interest in Northgas without payment through its Urengoygazprom subsidiary.

  Aftermath

  The dispute was described as resolved, and Gazprom regained majority control of the producer.

  Source

1. 1Northgasen.wikipedia.org