Novatek inks Arctic LNG 2 supply deal with China’s Shenergy

Russia’s Novatek said on Thursday it signed a deal with Shenergy Group to supply the Chinese firm with liquefied natural gas from its Arctic LNG 2 project.

The supply and purchase deal stipulates the cumulative supply of more than three million tons of LNG for a term of 15 years, Novatek said.

The Russian independent producer will deliver LNG to terminals in China on a DES basis.

“Our LNG commercial strategy is to diversify our client base and target end consumers in the fast-growing Asian Pacific region,” Novatek’s chief executive and Russian billionaire Leonid Mikhelson, said.

“The Chinese market is one of the key regions in our LNG marketing strategy, and we plan to further increase our supplies of liquefied natural gas to this country,” he said.

To remind, Novatek’s finance chief Mark Gyetvay said last week that Novatek had signed several binding new contracts for the sale of LNG from its second project in the Russian Arctic.

The 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 is more than 32 percent complete and Novatek still plans to launch the first GBS in 2023.

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

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

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