Novatek Starts Production at Yamal LNG

In a brief statement released Tuesday, Russian energy firm Novatek announced that production has commenced at its Yamal LNG facility on the Kara Sea. Its first cargo loading is scheduled for Friday, when the icebreaking LNG tanker Christophe de Margerie will take on a load for a buyer in China. 

"This event marks a milestone accomplishment for the Yamal LNG project," said Novatek chairman Leonid Mikhelson. "The commencement of LNG production begins a new chapter in our corporate history. Many contractors and suppliers from Russia and abroad were involved in this project. We have received great support from the Russian government in implementing this project."

Mikhelson said that with the support of its partners, Novatek has delivered the first Yamal train on schedule and on budget – an achievement given the facility's remote Arctic location – and he says that the second and third trains will be completed several months sooner than planned. 

Novatek is already moving forward on plans to expand Yamal's capacity with an additional liquefaction train, and with backing from Chinese state-owned oil firm CNPC and China Development Bank, it is building industrial infrastructure in preparation for a complete second facility on the other side of the Gulf of Ob. Construction on the new “Arctic LNG-2” plant is expected to begin in 2019, with the first of three trains operational by 2023. As with Yamal, the natural gas will be exported via Russia's icebound Northern Sea Route. 

In October, the firm also announced plans for a large transshipment hub on the Kamchatka Peninsula. The terminal is anticipated to have a capacity of 20 million tons per annum (MTPA), and it 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. It will also reduce the number of tonne-miles per shipment for its high-spec icebreaking LNG carriers, as conventional carriers can be used to carry the product from Kamchatka to destinations in the Pacific basin.