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FID Taken on Arctic LNG 2 Project

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By The Maritime Executive 2019-09-08 21:22:56

Total, Novatek and the other project shareholders have approved the final investment decision (FID) for Arctic LNG 2, a major LNG development located on the Gydan peninsula, Russia. 

The project will have a production capacity of 19.8 million tons per year (Mt/y) and is expected to export its first LNG cargo by 2023, the second and third train to start up by 2024 and 2026.

Total has a direct 10 percent interest in Arctic LNG 2 alongside Novatek (60 percent), CNOOC (10 percent), CNPC (10 percent) and a Mitsui-Jogmec consortium, Japan Arctic LNG (10 percent). Total also owns an 11.6 percent indirect participation in the project through its 19.4 percent stake in Novatek, thus an aggregated economic interest of 21.6 percent in the project. 

The project has very low upstream costs with the development of the giant resources from the Utrenneye onshore gas and condensate field. The installation of three concrete gravity-based structures in the Gulf of Ob on each of which will be located a 6.6 Mt/y liquefaction train will contribute to significant capex reduction (more than 30 percent per ton of LNG) compared to Yamal LNG. Also, the close proximity to Yamal LNG will allow Arctic LNG 2 to leverage synergies with existing infrastructure and logistics facilities.

A consortium of TechnipFMC, Saipem and NIPIGAS (Russia) was awarded the contract on engineering, procurement and construction of the LNG plant, with the design and construction of the gravity-based structures to be built by the Russian company SAREN, a joint venture of RHI Russia and Saipem. As of today, more than 90 percent of long-lead items (including cryogenic heat exchangers, gas turbines, and the compressors for the liquefaction trains) have been ordered. Drilling of production wells, construction of roads and the field’s production infrastructure have been commenced.

Arctic LNG 2 production will be delivered to international markets by a fleet of ice-class LNG carriers that will be able to use the Northern Sea Route and the transshipment terminal in Kamchatka for cargoes destined for Asia and the transshipment terminal close to Murmansk for cargoes destined for Europe.