Novatek delivers record number of Yamal LNG cargoes via NSR in Q3

Russian independent LNG producer Novatek said it has delivered a record number of Yamal LNG cargoes in the third quarter via the eastern part of the Northern Sea Route.

The Yamal LNG plant in Sabetta has three 5.5 mtpa liquefaction trains and one smaller unit with a capacity of about 900 thousand tons per year.

Besides Novatek that holds 50.1 percent in Yamal LNG, other shareholders include France’s TotalEnergies and China’s CNPC with a 20 percent stake, each, and the Silk Road Fund that owns a 9.9 percent share.

“During the third quarter, for the first time, we shipped half of the cargoes (29 out
of 58 cargoes) along the eastern part of the NSR directly to Asian buyers under long-term and spot contracts,” Lev Feodosyev, first deputy chairman of Novatek’s management board, said on Thursday during a conference call discussing the company’s quarterly results.

He also said that more than half of deliveries via the “traditional” westbound route ended up in Asia as well.

“During 2021 navigation season, we have planned 44 LNG cargoes along the
NSR compared to 34 deliveries in 2020, including 29 long-term cargoes and 15 spot
deliveries,” Feodosyev said.

Novatek has during the January-September period already delivered 39 LNG cargoes onboard the 15 Arc7 ice-class tankers serving the Yamal LNG project via the NSR, according to Feodosyev.

Fourth LNG train still in “pilot mode”

Out of the 58 LNG cargoes shipped during the third quarter, 83 percent or 48 of them
were sold under long-term contracts, while the remaining 10 cargoes were sold under
spot contracts, Feodosyev said.

In total, the project has shipped 4.24 million tons of LNG in the third quarter,
which is about 14 percent lower compared to the previous quarter, as a result of planned maintenance works at the first train.

In the third quarter, Yamal LNG produced 4.38 million tons of LNG and 234 thousand tons of unstable gas condensate.

“By the end of the year, we forecast that LNG production will be 2-3 percent higher than in 2020,” Feodosyev said.

He also said that the fourth Yamal LNG train “continues to operate in pilot mode with periodic shutdowns for equipment modification.” At the end of the third quarter, Novatek had produced 122 thousand tons of LNG at this unit, he said.

Since the launch of the first train back in 2017, the giant Yamal LNG project has shipped 815 cargoes or 59.6 million tons to its customers, according to Feodosyev.

In addition, the project has also dispatched 112 shipments of stable gas condensate or 3.6 million tons, he said.

Second Arctic LNG project 52 percent complete

Besides the Yamal LNG project, Novatek is also moving forward with the construction of its second export project in the Arctic.

The Arctic LNG 2 project located on the Gydan peninsula includes the construction of three LNG trains with a capacity of 6.6 mtpa, each, using gravity-based structure platforms.

The project had reached a 52 percent completion as of the end of the third quarter, Feodosyev said, adding that the first GBS was about 69 percent complete.

Novatek said in September its yard in Murmansk had received the first two Arctic LNG 2 modules from China.

After that, the Murmansk LNG construction center received two more modules as well.

Feodosyev said that Novatek has already installed these four pipe-rack modules weighing about nine thousand tons each onto the gravity base structure (GBS) platform of the first Arctic LNG 2 train.

The firm expects to take delivery of 10 more modules for the first GBS by the end of the first quarter next year.

“In May 2022, we expect the arrival of the first module for the second GBS,” Feodosyev said.

Novatek is the LNG project’s operator with a 60 percent stake, France’s TotalEnergies owns 10 percent while CNPC and CNOOC of China have 10 percent, each.

Japan Arctic LNG, a consortium of Mitsui & Co and Jogmec, owns a 10 percent stake in the project as well.

The partners plan to launch the first LNG train in 2023, with trains 2 and 3 to follow in 2024 and 2025, respectively.

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