Yamal LNG is Novaket's largest project, launched with an initial capacity of 16.5 million tons. Mikhelson said that this entire volume had been contracted under long-term deals, with prices that are "normal and good" in today's market.
"But this year, production will be about 21 million tons. The additional output goes to the spot market. It, of course, brings very high profits, given the abnormal prices on the market. The initial 16.6 million tons bring slightly less profit than these additional 4 million tons," Mikhelson said at the Verona Eurasian Economic Forum.
Novatek's chief recalled how European leaders have long said that they would prefer spot market trade rather than long-term contracts, with a view to abandoning fossil fuels.
Yamal LNG is a natural gas project based on the Yuzhno-Tambeyskoye field in Russia. Novatek owns a controlling stake in the project with 50.1%, France's Total and China's CNPC each own 20%, while the Silk Road Fund owns 9.9%.