The Russian government is backing the construction of Novatek’s LNG transshipment complex in Kamchatka, which would help the producer slash shipping costs.
Russian Prime Minister Mikhail Mishustin has approved an investment of more than 21 billion rubles ($291.2 million), according to a statement released on Monday.
These funds will go to the construction, including dredging works, of the approach channel in Bechevinskaya Bay, where the LNG transshipment complex would be located.
The 6 kilometers long channel would be ready by the launch of the complex planned for 2023, the statement said.
Novatek’s unit Arctic Transshipment will operate the complex which will handle about 21.7 million tonnes of LNG per year.
The complex will transship Yamal and Arctic 2 LNG cargoes from Arc7 ice-class tankers to conventional ships.
This transshipment hub will significantly reduce transportation costs and shipping time of Arctic LNG cargoes going to Asia.
Novatek is also building the second transshipment hub in Murmansk and recently sold a 10 percent stake in both of the facilities to France’s TotalEnergies.
Each complex will have a floating LNG storage unit with a capacity of 360,000 cubic meters with two ship-to-ship transshipment points.