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Novatek Secures Financing for Arctic LNG 2 Terminal

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Arctic LNG 2 (conceptual illustration courtesy Novatek)

By The Maritime Executive 2019-07-25 20:44:08

Russian energy company Novatek has completed the sale of participation interests in its Arctic LNG 2 terminal near the port of Sabetta, giving it the funds needed to move forward with a final investment decision. Chinese state oil companies CNPC and CNOOC and a JV comprised of Mitsui & Co. and Japanese state-owned oil company JOGMEC have agreed to finance the project, which will provide export capacity for the 1.1 billion cubic meter Utrenneye field on the Gulf of Ob. 

TechnipFMC announced earlier this week that it has won the $7.6 billion EPC contract for the new Arctic LNG 2 liquefaction and export terminal. The facility involves a novel design: its liquefaction trains will be pre-installed on three gravity-based structures, which will be towed to the site and sunk into place. The facility modules will be built in Asian and Russian fabrication yards. 

Arctic LNG 2 expands on the success of the adjacent Yamal LNG project at the port of Sabetta. The site is on a remote stretch of Siberia's Arctic coastline, rendering construction and transportation challenging, but Yamal's engineers circumvented these difficulties through modular pre-fabrication of the liquefaction trains. Novatek and its partners have chartered a fleet of specialized icebreaking LNG carriers to carry the plant's production along Russia's Northern Sea Route (NSR). 

One of these LNGCs, the Vladimir Rusanov, recently completed an unescorted transit of the NSR in just six days, a new record for an independent passage without the help of an icebreaker. The total voyage time between Sabetta and the destination port of Tianjin was 16 days - less than half the time required for a non-Arctic voyage around Europe, through the Suez Canal, across the Indian Ocean and up through the South China Sea. 

"For the second year in a row, our Arc7 ice-class LNG tankers were once again the first ships to open the summer navigation period via the Northern Sea Route,” noted First Deputy Chairman of the Management Board Lev Feodosyev. “This voyage set a number of records for the passage time of the ice part of the NSR, and for the total voyage time to China from the Russian Arctic region.