Rotenberg gets into gas production with new National Gas Group

Rotenberg gets into gas production with new National Gas Group
Russian President Vladimir Putin and his close friend Arkady Rotenberg. / Photo by CC
By bne IntelliNews August 12, 2016

Arkady Rotenberg, a Russian tycoon and close friend of President Vladimir Putin, has followed his fellow stoligarch Gennady Timchenko into the gas business and set up the National Gas Group (NGG). Rotenberg is a familiar figure in the gas infrastructure business, but this move into gas production is a new direction for him, say analysts.

Russia's gas sector is dominated by Gazprom and access is jealously guarded by the Kremlin, but that hasn't stopped Timchenko from buying into Novatek, Russia’s only large privately owned gas company, which also has the only other gas export license than Gazprom for liquefied natural gas (LNG) exports.

Rotenberg is hoping to pull off the same trick with his longtime partner Artem Obolensky. NGG is a management company for the commercial company Rusgazdobycha, which recently partnered with Gazprom to develop the Parusovoye, North Parusovoye and Semakovskoye fields in the gas-rich Yamal-Nenets Autonomous Region, Vedomosti reported. None of the companies or businessmen responded to questions form the paper.

Rotenberg already owns Stroygazmontazh, which works closely with Gazprom and builds pipelines. Amongst the company’s contracts is work on thePower of Siberia pipeline that will link Russia’s gasfields with northwest China.

Rotenberg also owns Fertilizers (80%), TPS Avia (34.7%), SMP Bank (37.97%), Red Square (100%), Pipe metal (100%), among other assets, and is ranked by Forbes magazine as Russia's 75th richest man worth $1bn in 2016. However, Forbes ranked him number one in 2015 in terms of the number of state orders that his companies won, which were worth a total of RUB555.5bn ($8.6bn). The magazine dubbed Rotenberg “King of state orders”.

Rotenberg was put on the US sanctions list in 2014 and sold 75.5% of his shares in Gazprom drilling to his son Igor, as well as 26% of his shares in road builder Mostotrest and 33% in SCC Real Estate. 

NGG was registered on August 9, and Rotenberg owns 51% of share capital with Obolensky holding the remaining 49%, who is also the general director of both NGG and Rusgazdobychi, Vedomosti reported. Rusgazdobychi is owned by Russian Holding Company (99%) and Obolensky (1%), according to SPARK-Interfax, cited by Vedomosti. Russian Holding Company in turn, belongs to Cyprus Olpon Investmenst Ltd, the paper reports.

NGG has been set to consolidate more assets in the gas sector, speculate analysts, who take it as a sign that Rotenberg is intending to expand his gas business.

In addition to cooperating with Gazprom to extract gas at the Parusovoye, North Parusovoye and Semakovskoye gasfields, Rusgazdobycha paid RUB1.21bn ($18mn) for the rights to exploit the site for other hydrocarbons, where there is thought to be 10.3mn tonnes of oil and 46.6bn cubic metres of gas.