Kogas Eyes Arctic LNG 2 Opportunities

South Korean natural gas company Kogas is interested in entering the Arctic LNG 2, a giant liquefied natural gas project led by Novatek on the Gydan Peninsula in Russia.

The company signed a Memorandum of Understanding (MoU) with Russian counterpart PAO Novatek on June 22 during a state of visit of the President of the Republic of Korea Moon Jae-in to Russia.

The MoU lays the groundwork for the duo to collaborate and develop further LNG opportunities.

Within that framework, Kogas is interested in the possible LNG off-take from the Arctic LNG 2, participation in the LNG transshipment project in Kamchatka and other infrastructure projects, as well as developing cooperation in LNG trading and logistics optimization, including swap operations.

 “The Asian Pacific markets are a priority destination for our LNG projects as this important geographical region represents the fastest growing markets for natural gas consumption, and South Korea is presently one of the largest importers of LNG,” Novatek’s Chairman of Management Board Leonid Mikhelson said.

“Our scalable LNG projects combined with our huge hydrocarbon resource base, our low cost LNG production and the further development of our logistics model using the Northern Sea Route and the transshipment terminal in Kamchatka create perfect opportunities for mutually beneficial cooperation for our potential partners.”

The MoU comes on the back of Total’s acquisition of stake in Arctic LNG 2, which is expected to unlock more than 7 billion boe of hydrocarbons’ resources in the onshore Utrenneye gas and condensate field.

The project will involve the installation of three gravity-based structures in the Gulf of Ob on which the three liquefaction trains of 6.6 Mt/year capacity each will be mounted.

Arctic LNG 2 cargoes are planned to be delivered to international markets by a fleet of ice-class LNG carriers that will be able to use the Northern Sea Route for cargoes destined for Asia, the same as for Yamal LNG.

Following the bilateral talks, the Russian Federation and the Republic of Korea adopted a joint statement and signed a package of interdepartmental and corporate documents paving the way for innovation platform for the fourth industrial revolution, free trade between Russia and South Korea, and cooperation in telecommunications and information and communications technologies.

Aside to cooperation on LNG, the countries also plan to bolster ties in the railroad sector, power generation and social security.