China's Sinopec may join Russia's Yamal LNG project: source

MOSCOW (REUTERS) - China's Sinopec is in talks to enter a liquefied natural gas project being run by Russia's Novatek, and may sign an agreement next week, a source close to the talks told Reuters.

Novatek has 80 per cent and while France's Total owns 20 per cent of the Yamal LNG project, which is due to start production in 2015-2016 with a goal of producing 15 million tonnes per year by 2018.

Novatek has long been seeking more equity partners in the US$20 billion (S$25 billion) project, situated on the Arctic Yamal peninsula, and has said it plans to retain at least 51 per cent of Yamal LNG.

The size of the stake that Sinopec could acquire is not yet clear. Spokesmen both for Novatek and Sinopec declined comments.

A senior source in Moscow said that Novatek may sign an agreement with Sinopec next week during the St Petersburg International Economic Forum, a major investor showcase that is Russia's answer to the World Economic Forum in Davos.

"We are working on that with Sinopec," the source said.

A second source said that Novatek may sign a deal with a Chinese company next week. He declined to disclose the name of the company.