How Putin’s alleged ‘business associate’ made $400m from a major Russian gas deal

Mikhelson needed a strategy. Without political protection, Novatek’s founder may have faced similar pressures to Bogachev. “Novatek could not have survived as an independent producer if it did not allow people from Putin’s inner circle to come in and become shareholders,” Milov claimed. “What Mikhelson did is the smoothest integration with the Kremlin’s people. Not a hostile takeover. He bought himself the ability to implement his vision.

In May 2009, Volga Group announced it had increased its stake in Novatek, and Timchenko had been made a director. As part of the deal, Novatek would acquire a 51% share of Yamal LNG from Volga and associated companies. Yamal’s importance is not only commercial. “One of Putin’s ambitions was to re-establish Russian control over the Arctic coast,” said Mikhail Krutikhin, a partner at the consultancy RusEnergy. Moscow’s military presence in the region was weakened by the fall of the Soviet Union, and Putin was convinced commerce could help reverse that. “This was a project that had a very interesting political meaning,” Krutikhin said.

Days later, Kolbin apparently cashed in. On 14 March, company accounts show Varix sold its shares in Yamal for $526m, netting an estimated $416m profit. That September, Timchenko sold up, too. Innecto’s remaining 23.9% went for $450m, according to company filings.Photograph: Novatek Navolution is named as a “related party” in accounts filed by a Timchenko Cyprus company, Innecto. The filing gives a clear definition for the term: “Related parties are companies which are subject to common control”.An invoice dated 29 June 2011, addressed to Olneil and issued by the Maritime Authority of the Cayman Islands, shows one of the registry’s surveyors travelled to Germany for a “meeting to discuss Project Graceful”.

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