Glencore to buy LNG from Novatek’s second Arctic project

Switzerland-based trader Glencore will buy LNG from Novatek’s Arctic LNG 2 project in Russia as part of a deal revealed on Wednesday.

Novatek said in a statement its gas and power unit and an affiliate of Glencore signed a heads of agreement for the long-term supply of LNG from the project, but it did not reveal the duration of the contract.

The agreement establishes the key commercial terms for the long-term supply in excess of 0.5 million tons of LNG per annum from the Arctic project, the Russian producer said.

In addition, Novatek said it would deliver LNG to a number of locations in East Asia.

“The market for LNG in the Asia Pacific region has fully recovered from the impact of the coronavirus pandemic and has now resumed a stable growth phase”, Novatek’s chief Leonid Mikhelson, said.

“This agreement is consistent with Novatek’s commercial strategy to build a sustainable LNG sales portfolio including both end customers and portfolio players in the Asia Pacific market, with LNG delivered all-year-round along the Northern Sea Route,” he said.

This marks the second Arctic LNG 2 deal Novatek announced on Wednesday following the agreement with China’s Zhejiang Energy.

Under that deal, Novatek would supply up to one million tons of LNG from the 19.8 mtpa Arctic LNG 2 project for a term of 15 years.

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