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(Reuters; June 26) - Russia's Novatek, due to launch the country's next LNG project in partnership with Total in 2016, will pre-sell half the gas by the end of next year, its chief executive, Leonid Mikhelson, told reporters. "After we take a final investment decision and before we begin project financing, we plan to sign contracts with consumers and will contract out about 50 percent of the Yamal LNG project (gas). Signing contracts will open up project financing for us," Mikhelson said.

A final investment decision is due by the end of the year, he told reporters June 22 at the Russian government's St Petersburg International Economic Forum. He said Novatek had chosen French bank Societe General and Russian banks Gazprombank and Sberbank to organize financing for the $20 billion Arctic LNG project. Novatek wants Yamal LNG to start production at more than 650 million cubic feet of gas per day in 2016, perhaps tripling the plant's capacity in later years.

Russia currently has only one LNG production complex, the Sakhalin-2 plant on the Pacific island of the same name. Analysts say Yamal LNG, which will deliver gas to market via Russia's icebound northern seas in a fleet of ice-class LNG carriers, could have trouble competing on the Asian market. The Yamal Peninsula stretches north in the Russian Arctic in northwest Siberia.

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