UPDATE 2-Russia's Timchenko maps two-pronged drive into Asian gas market

Thu Jun 20, 2013 2:39pm EDT

* Gunvor to seek new LNG contracts in Asia

* Asia is key export market for Novatek's Yamal-LNG

* Gunvor says no plans to get into in pre-financing Rosneft

By Katya Golubkova

ST PETERSBURG, Russia, June 20 (Reuters) - Russian tycoon Gennady Timchenko on Thursday mapped out plans to plunge his trading house Gunvor and producer Novatek together into Asia's gas market, challenging the export monopoly of state-controlled giant Gazprom.

The strategy would need the Kremlin to lift Gazprom's exclusive export rights and might then involve Novatek recruiting a Chinese partner to help develop its liquefied natural gas (LNG) project in northwest Siberia's Yamal peninsula.

Timchenko said that powerful energy trader Gunvor, already a big player in LNG, may also handle output from Yamal and advance further cooperation with Chinese companies in other markets.

"We are not stepping on Gazprom's toes. But I think we may participate (in export) where Gazprom is not present," Timchenko, who as a long-standing ally of President Vladimir Putin may have the clout to challenge Gazprom, told reporters.

Gazprom is trying to shift more of its exports eastward and Timchenko's Asian plans are likely to lead to rivalry as Russia, the world's second biggest gas producer after the United States, seeks to diversify away from Europe where a weak economy is limiting gas demand.

Novatek is Russia's No.2 gas producer after Gazprom and is majority-owned by Timchenko and chief executive Leonid Mikhelson.

The $20-billion Yamal LNG plant it is building is set to become Russia's second such operation after Gazprom's Sakhalin-2, based on an island off Russia's Pacific coast, which currently supplies some liquefied gas to Asia.

Gazprom, the world's largest producer of conventional gas, is also negotiating a contract to supply China with gas via a pipeline that has yet to be built.

A source told Reuters last week China's Sinopec is negotiating to join Novatek's project, which is planned to launch by 2017 with capacity to produce up to 17 million tonnes of LNG per year.

GUNVOR AND CHINESE COMPANIES

Expanding on the potential role for Gunvor, in which he is co-owner, Timchenko said:

"We plan to set up joint ventures, Gunvor and Chinese companies. We plan to work together, we have good synergy opportunities if we join forces in certain parts of the world."

"We are looking at how we can work with Chinese companies in third countries, not necessarily in Russia or China," he added.

Gunvor has long dominated trade of Russian oil but has significantly cut its exposure over the past year. It has bought coal assets in Russia and the United States, two refineries in Europe and built new storage capacity over the past few years.

State oil major Rosneft also harbours plans to set up an LNG plant in Russia's Far East with ExxonMobil and has also been lobbying for the rights to ship LNG abroad.

Timchenko began to appear in public only last year. On Thursday the silver-haired businessman, dressed in a dark blue suit and surrounded by top executives of petrochemical, construction and shipping businesses, spoke for almost an hour.

He played down talk of disagreements with Rosneft CEO Igor Sechin, also a powerful ally of Putin. He said Gunvor had stopped winning the oil company's contracts because they were too expensive and not due to any rift with Sechin.

"I've met Igor Ivanovich yesterday and if there were photographers they would have seen us smiling... Crude prices being offered at tenders don't suit us. We can buy it cheaper at other places in the world," he said.

Timchenko said Rosneft, which became the world's largest traded oil company after acquiring TNK-BP earlier this year from BP and a group of Soviet-born tycoons, had invited Gunvor to back the $55-billion deal with cash in exchange for supplies.

"He (Rosneft CEO) was offering us to participate in financing, to make an advance payment worth billions but we don't have financial resources yet to make such an advance," he said.

To acquire TNK-BP, which pumps around 1.5 million barrels per day of oil, Rosneft had to borrow up to $40 billion, mostly from Western banks.

It has covered immediate needs by lining up a syndicated loan as well as $10 billion in financing from traders Vitol and Glencore.

Timchenko added that Gunvor still deals with Rosneft on oil products and hopes "things will click into place" after a while.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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