Novatek Signs Chinese Deals for Arctic LNG 2
Russian energy company Novatek has signed agreements with Chinese National Petroleum Company (CNPC) and China Development Bank for the Arctic LNG 2 project.
The Chairman of Novatek’s Management Board Leonid Mikhelson said: “Our strategy envisages a rapid growth of LNG production using international financing sources.”
Novatek has already done business with both companies as part of the Yamal LNG project. CNPC holds a 20 percent stake in the Yamal project, and Novatek received a $12 billion loan from the China Development Bank. In addition the Chinese Silk Road Fund holds a 9.9 percent stake.
While Novatek received $2.4 billion in state funding for Yamal, it does not expect to do so for this new development, further highlighting the importance of this new cooperation with the Chinese, reports the High North News. Talks with Saudi investors are said to be ongoing, and Total, which holds a 20 percent stake in Yamal LNG, is also considering investment in Arctic LNG 2.
Construction is expected to begin in 2019, the first of three trains operational by 2023. As with Yamal, natural gas will be exported via the Northern Sea Route.
Plans for a transshipment hub at Kamchatka were announced last week. The terminal is anticipated to have a capacity of 20 million tons per annum (MTPA) and will be completed by 2023. Novatek says it will optimize the logistics of LNG supplies from the Arctic region, stimulate use of the Northern Sea Route and create a new LNG supply hub for Asian-Pacific regional consumers.
Once fully operational Arctic LNG 2 will have a production capacity of 18 million tons compared to Yamal LNG's 16.5 million tons. Yamal LNG expected to begin production this year, with the second and third trains operational in 2018 and 2019.