Kommersant reported citing sources familiar with the situation that Novatek is in talks to purchase the gas assets of Alrosa Urengoi Gas Company LLC and Geotransgaz.

A NOVATEK representative confirmed the talks to Interfax, adding that the properties are located in a region where the company operates close to transportation infrastructure.

Kommersant said Mr Leonid Mikhelson CEO of NOVATEK sent a proposal to VTB chief Mr Andrei Kostin on June 14 offering to pay USD 160 million for 90% of Urengoi Gas Company. Mr Mikhelson said the price was subject to adjustment depending on the size of net debt and other factors identified during a detailed check of the company, adding that the offer is valid until July 15. NOVATEK is also interested in Geotransgaz, but the talks on that asset have not been completed yet and no offer has been formulated.

VTB purchased the assets from Alrosa in 2009 for USD 620 million.

Since then, USD 135 million has been invested in the projects and another USD 145 million in interest has been paid. Alrosa is obligated to buy the companies back from VTB Capital in October 2012 for USD 1.2 billion. From the moment the deal was concluded it was assumed that VTB would launch an intensive search for a buyer."

Alrosa had spent the previous two years looking for a buyer for the gas assets on its own and NOVATEK was named as one contender. Itera and Gazprombank were also interested.

(Sourced from Kommersant)