Novatek Eyes Loan of $1Bln

Novatek plans to raise up to $1 billion via a syndicated loan to fund organic growth and acquisitions, a banking source said Tuesday.

Novatek, the country's largest independent gas producer, has paid off almost all its debts in the past few years. The loan would be its largest to date.

"The company is considering raising the money for operational activities and [mergers and acquisitions]," the banking source said.

Novatek declined immediate comment.

Novatek, which is around 19 percent owned by Gazprom, said in November that it was studying the possibility of entering projects in eastern Siberia as it seeks to diversify away from its core production region of western Siberia.

Last year, the company also signed an exploration deal with Egypt, its first foray outside Russia, and said it was studying joint projects with French oil major Total inside and outside Russia.

Novatek has said it expects capital expenditures to amount to $300 million to $350 million in the fourth quarter of 2007 in addition to $510 million invested in the first three quarters of 2007.

Novatek wants to increase gas production to 45 billion cubic meters by 2010 and 65 bcm by 2015.

In 2007, it was forced to trim its production forecast to 28.7 bcm from the previous 30 bcm after Gazprom said its gas storage was full following an unusually warm winter in Europe and Russia, and asked rivals to cut output.