Novatek’s second Arctic LNG project 59 percent complete, Yamal LNG production up

Novatek is moving forward with the construction of its second LNG export project in the Arctic, while its flagship Yamal LNG development continues to produce above nameplate capacity.

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.

As of December 31, 2021, the overall project completion status has reached about 59 percent, Novatek’s head of investor relations Alexander Nazarov said on Friday during a conference call discussing the company’s 2021 results.

Novatek receives modules from China and installs them on the GBS at its construction yard in Belokamenka in Murmansk. A joint venture of Technip Energies, Saipem, and Nipigaz is the main contractor of the Arctic LNG 2 project.

The independent LNG producer is still expecting to launch the first LNG train in 2023, followed by the second and the third unit in 2024 and 2025 respectfully.

Following completion of concrete works on the first GBS, Novatek is currently integrating the topside modules onto the structure.

Nazarov said that the firm has already installed 10 out of 14 modules on the first GBS.

Last week, the Murmansk yard received a module onboard the carrier Audax via the Northern Sea Route. The module carrier delivered the 13th module while the last module for the first train was expected to arrive at Murmansk last Friday, Nazarov said.

In parallel, concrete casting of the second GBS continues and the first modules for the second train should arrive in Murmansk in May this year. Novatek expects to receive the first modules for the third train in May 2023.

Yamal LNG production climbs 4 percent in 2021

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.

“In 2021, Yamal LNG received the approval of a technical expert review that Trains 1-3 can effectively operate at 120 percent of nameplate capacity at below-zero temperatures,” Nazarov said.

He said that low temperatures had allowed the three trains to run at more than 17 percent of their nameplate capacity in 2021.

In addition to this, Novatek commissioned the smaller fourth train in May last year.

“This helped Yamal LNG to produce 19.64 million tons of LNG in 2021, which
is 4 percent higher than in 2020. Yamal LNG also produced 1 million tons of unstable gas
condensate,” Nazarov said.

Yamal LNG shipped 266 cargoes or about 19.5 million tons during the last year.

Out of this, 199 cargoes, or about 75 percent, were dispatched under long-term contracts, while the remaining 25 percent were sold under spot contracts, Nazarov said.

Vysotsk LNG boost

Besides these large facilities, Novatek also owns a medium-scale plant in Russia’s Baltic Sea port of Vysotsk.

The Vysotsk facility has a capacity of 660 thousand tons of LNG per year. Its infrastructure includes a 42,000 cbm LNG storage tank but also an offloading berth designed to handle carriers with a capacity of up to 30,000 cbm.

“Our Cryogas-Vysotsk project also demonstrated strong operational results during 2021,
operating at 115 percent of its nameplate capacity, and produced an all-time high volume of 757 thousand tons, or 38 percent more than in 2020,” Nazarov said.

In December 2021, monthly LNG offloading volume reached a record level of 78 thousand tons.

Nazarov said Novatek had achieved the increase in the plant’s productivity by debottlenecking and removing production restrictions, as well as due to a higher reliability rate.

“To further improve the productivity of the complex, construction of a booster compressor
station is being considered for 2023, which will increase the LNG output level to 820
thousand tons per year,” Nazarov said.

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