Novatek in ammonia talks with Mitsui

Russian LNG export giant Novatek is reportedly in talks with Japan’s Mitsui for a planned ammonia project in the Arctic.

According to a report by Kommersant on Thursday, Novatek is looking to sell a stake in the planned Obsky Gas Chemistry project.

Mitsui would also buy ammonia produced at the planned Yamal facility which would have a capacity of 2.2 million tons, Kommersant reported citing unidentified sources.

The two firms are already partners in Novatek’s second LNG export project, Arctic LNG 2.

The first stage of the ammonia project could be launched in 2026 and it would also include a CCS development, Kommersant said. The costs could reach up to $2.4 billion, the report said.

Previously, Novatek had planned to build the Obsky LNG project with a capacity of up to 5 million tonnes per year.

However, Novatek earlier this year confirmed plans to produce ammonia, hydrogen and methanol, instead of LNG.

The firm also said in June it had signed a deal with two compatriot banks to secure financing for an ammonia and chemical production plant on the Yamal peninsula.

“Ammonia is a promising low-carbon fuel in great demand in the chemical industry, and an efficient transport carrier of hydrogen,” Novatek’s chief Leonid Mikhelson said then.

Novatek already operates the giant Yamal LNG export project in the Russian Arctic and is building the Arctic LNG 2 terminal on the Gydan peninsula, along with several other developments.

The firm plans to produce 57-70 mtpa of LNG from these projects by 2030.

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