From pipeline builder to gas producer
Mikhelson's fortune grew out of the construction side of the Soviet oil and gas industry. In the late 1980s he ran a state pipeline building trust based in Kuibyshev, the city now called Samara. When the Soviet Union broke apart, the trust was privatized and became one of the first companies in Russia to change from state to private ownership. Mikhelson and a group of partners used it as a base to move from building infrastructure for others into owning gas fields themselves.
In the mid 1990s the group set up the company that would become Novatek and began acquiring licenses in the Yamal-Nenets region of western Siberia, an area rich in natural gas but far from markets. For years Russian gas exports were controlled by Gazprom, so independent producers had to sell inside the country and fight for pipeline access. Novatek grew by developing fields cheaply, keeping costs low and building processing capacity for gas condensate, which it could sell abroad.
The company listed depositary receipts in London in 2005, which brought foreign investors and a public valuation. The decisive change came when Russia allowed Novatek to export liquefied natural gas. Its Yamal LNG project, built with partners on the Arctic coast, shipped its first cargo in 2017 and turned the company into a global gas seller.
Novatek, Sibur and other stakes
Mikhelson's main assets are his holdings in two large companies:
- Novatek: he is chairman of the management board and its largest shareholder. Other important owners include the investor Gennady Timchenko and the French energy group TotalEnergies.
- Sibur: Russia's largest petrochemical company, which processes gas byproducts into plastics and rubber. Mikhelson became chairman of Sibur's board in 2011 after a group including him and Timchenko bought control. Sibur later combined with the Tatarstan chemical group TAIF.
Novatek's second big export project, Arctic LNG 2 on the Gydan peninsula, was meant to double its liquefied gas capacity. After Russia's full scale invasion of Ukraine in 2022, Western sanctions targeted the project and its shipping, and in 2023 the United States imposed measures that made it hard to find buyers and tankers. The project's progress has since been slowed.
Mikhelson himself was placed under sanctions by the United Kingdom in 2022, and he stepped back from some foreign roles. His wealth remains tied mostly to the market value of Novatek and Sibur, both of which depend on the Russian gas sector and on export routes that have narrowed since the war began.
Early years in the Soviet construction industry
Leonid Viktorovich Mikhelson was born in 1955 in Kaspiysk, a town in Dagestan on the Caspian Sea, where his father was a pipeline construction engineer. He studied at the Kuibyshev Institute of Civil Engineering and graduated in 1977 as an engineer. Like many graduates of his generation in that field, he was sent to work in the oil and gas regions of Siberia.
His first job was as a foreman on pipeline construction sites in the Tyumen region, near Surgut. Over the following decade he worked his way up through the construction trusts that built the gas pipelines carrying Siberian fuel west. By 1987 he was running the Kuibyshev pipeline construction trust.
This background shaped the way he later ran Novatek. He came to gas production as a builder rather than a geologist or a banker, and the company became known for completing projects on schedule in harsh Arctic conditions. Mikhelson has generally kept a low public profile, giving few interviews and rarely commenting on politics, though he has met regularly with Russian officials on energy matters.
Art patronage and public role
Mikhelson is best known outside the energy business as a patron of contemporary art. In 2009 he founded the V-A-C Foundation, named after his daughter Victoria, to support contemporary artists and exhibitions. The foundation organized shows in Moscow and abroad and for several years ran a venue in Venice in a former warehouse on the Zattere waterfront.
The foundation's largest project was GES-2, a former power station near the Kremlin that was rebuilt to designs by the Italian architect Renzo Piano. It opened in late 2021 as a free public arts center with galleries, workshops and a library. After the invasion of Ukraine in 2022, the foundation canceled some programs, and its international activity was sharply reduced.
Mikhelson has also supported sport and civic projects in the regions where Novatek operates, as is common for large Russian resource companies. He has served on business associations, including the Russian Union of Industrialists and Entrepreneurs.