* Gas production in 2014 to rise 7 pct from 62 bcm in 2013
* In talks with a wide range of banks for Yamal LNG
* Yamal LNG cost seen similar to Novatek’s 56 cent/bbl net cost (Changes dateline, adds CEO’s quotes on financing and gas cost)
By Meeyoung Cho and Jane Chung
GOYANG, South Korea, March 26 (Reuters) - Russian gas producer Novatek’s $27 billion Yamal LNG project won’t be impacted by recent U.S. sanctions against a shareholder of the company, its chief executive said.
The comments by Leonid Mikhelson come after the United States last week sanctioned Novatek shareholder and billionaire businessman Gennady Timchenko as an ally of Russian President Vladimir Putin over Russia’s seizure of Crimea.
The sanctions prompted Timchenko to sell his near 50 percent stake in Swiss oil trading group Gunvor. Novatek’s shares plunged 12 percent on Friday after the sanctions were announced on concerns about their impact on the company, but have recovered some ground since.
Mikhelson’s comments on the sidelines of an international gas conference could offer assurance to investors and bankers that it’s business as usual for Novatek’s key project.
“I do not see any potential impact on Yamal LNG,” Mikhelson said, when asked if he sees the sanctions hurting the progress of the project.
Novatek is developing the Arctic Yamal liquefied natural gas (LNG) project together with partners Total of France and China’s CNPC.
The company could sell 9 percent out of its 60 percent stake in the project to a new partner, Mikhelson said. But he declined to name any potential buyers of the stake.
Total said earlier this month before the sanctions against Timchenko and other businessmen were announced that it will keep investing in Russia and the Yamal LNG project despite tensions over Ukraine.
Mikhelson said most of the infrastructure required for the construction of the Yamal project was already in place and it has now moved to the facility construction phase.
He said Novatek is now in talks with a wide range of banks, including Gazprombank, Societe Generale and Chinese banks, on the financing of the project, while declining to detail the volume of financing.
The CEO also said Novatek will continue its planned share buyback programme, and that he did not see any legal risks or any cause for risks from the sanctions.
Mikhelson also said the company’s gas production will rise by 7 percent this year from last year’s 62 billion cubic metres.
This gas had a net cost of 56 cents per barrel of oil equivalent, similar to the estimated cost for the Yamal LNG project, he said. “This is our competitive edge. In any market, our gas will look good,” the CEO said. (Editing by Muralikumar Anantharaman)