Russia’s Novatek says Arctic LNG 2 partners ink long-term offtake deals

Russia’s Novatek said on Wednesday it signed offtake deals with its partners in the Arctic LNG 2 project for all of the volumes from the development.

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.

Novatek said in a statement the Arctic LNG 2 partners signed 20-year sales and purchase agreements for the total LNG production volumes.

The Russian producer is the LNG project’s operator with a 60 percent stake, France’s Total 10 owns 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 new deals provide for supplies from Arctic LNG 2 on a free on board (FOB) basis at transshipment terminals in Murmansk and Kamchatka with pricing formulas linked to international oil and gas benchmarks, Novatek said.

In addition, the LNG offtake volumes are set in proportion to the respective participants’ ownership stakes in the project, it said.

“The long-term offtake agreements between Arctic LNG 2 and its participants ensure the future revenue stream from LNG sales and de-risks the project,” Novatek’s chief executive and Russian billionaire Leonid Mikhelson, said.

“This represents one of the most important milestones in attracting the project’s external financing that will be completed in 2021,” he said.

Novatek previously said the project’s partners were working to complete about $11 billion in external financing for the project that will cost around $21.3 billion in total.

The firm expects to launch the first LNG train in 2023, with trains 2 and 3 to follow in 2024 and 2026, respectively.

Most Popular

Cheniere takes FID on two more Corpus Christi LNG trains

US LNG exporting giant Cheniere has made a positive final investment decision to build two more midscale trains at its Corpus Christi LNG plant in Texas. The company has also issued full notice to proceed to Bechtel.

Golar progresses FLNG growth plans

Golar LNG said it had signed a final engineering study to confirm EPC price and delivery for a 5 mtpa MKIII FLNG.

Italian FSRU operator launches small-scale LNG service

Italy’s OLT Offshore LNG Toscana, the operator of the FSRU Toscana, has launched its small-scale liquefied natural gas service, enabling small vessels to load LNG at the FSRU.

More News Like This

Russia’s Novatek in LNG truck move

Russian LNG producer Novatek and compatriot National Carrier (NATCAR) are joining fores to develop the market for LNG as fuel for trucks.

Samsung Heavy cancels LNG carrier contract with Russia’s Zvezda

South Korean shipbuilding giant Samsung Heavy Industries has terminated contracts for 10 ice-class Arc7 LNG carriers and seven shuttle tankers with Russia's Zvezda.

Russian LNG production drops in April

Russian liquefied natural gas (LNG) production decreased in April compared to last year, according to the Russian statistics agency Rosstat.

Russian LNG production down in Q1

Russian liquefied natural gas (LNG) production decreased in the first quarter of this year, according to the Russian statistics agency Rosstat.