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Russia’s Novatek, Partners Sanction $21B Arctic LNG-2
Russia’s largest private natural gas producer Novatek and its partners on Thursday sanctioned the 19.8 million metric tons/year Arctic LNG-2 export facility, which would be sited north of Siberia.
The estimated $21.3 billion project on Russia’s Gyden Peninsula is to have three liquefied natural gas (LNG) trains, the first of which is set to begin operations in 2023. A second train is expected to start up in 2024, with the third in 2026.
Novatek, which would operate the project, has a 60% stake. Total SA, China National Petroleum Corp., China National Offshore Oil Corp. (CNOOC) and a consortium between Mitsui & Co and Japan Oil, Gas and Metals National Corp. each hold a 10% stake.
Novatek Chairman Leonid Mikhelson noted the company already has become a global LNG player with the 50.1% stake in the 16.6 mmty Yamal export facility. Yamal LNG partners are Total SA (20%), China National Petroleum Corp. (20%) and China’s Silk Road Fund (9.9%) and Vietnam.
“Our long-term strategy is to develop our vast low-cost hydrocarbon resources on the Yamal and Gydan peninsulas, as well as to maximize our cost competitiveness across LNG markets,” Mikhelson said.
A consortium of TechnipFMC, Saipem and Nipigas (Russia) is conducting the engineering, procurement and construction of Arctic LNG-2,, with gravity-based structure design and construction by Russia’s Saren.
Novatek has pledged to represent at least 10% of the global LNG market within the next 10 years. Russian President Vladimir Putin has also made expanding the country’s LNG footprint a national priority and wants to see the market share increase by at least 20% by 2035 from 8% in 2018.
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