Novatek Signs Partners for Arctic LNG-2 Project

Russian gas produce Novatek has closed its search for partners for its proposed Arctic LNG-2 project, adding a subsidiary of China National Petroleum Corporation (CNPC), CNOOC and the Japan Arctic LNG consortium to the project.

Novatek’s Arctic LNG-2 project proposes constructing three-train LNG export plant with a capacity of approximately 19.8 mmtpa extracted from the onshore Utrenneye field. The plant will be located across the Gulf of Ob from Novatek’s other large-scale LNG project, Yamal LNG.

Similar to Yamal, Arctic LNG-2 will be serviced by a fleet of ice-class LNG carriers that will utilize the Northern Sea Route for deliveries to Asia and Northern Europe.

Project participants now include Novatek (60%), Total (10%), CNPC (10%), CNOOC (10%) and the Japan Arctic LNG (10%), which is comprised of Mitsui & Co and Japan Oil, Gas and Metals National Corporation.

Novatek says with the partners now in place, it can now move towards making a final investment decision for the project.

“We now have formed the structure of the Project’s participants by successfully closing the sale of interests in Arctic LNG 2,” noted Leonid Mikhelson, Novatek’s Chairman of the Management Board. “The target level of NOVATEK’s participation has been reached, allowing us to make the final investment decision and optimally use the Company’s cash flow to finance our new projects.”

Start-up of the Arctic LNG-2 project is expected beginning in 2023.