Two Chinese companies join Novatek’s Arctic LNG 2 project

Russia’s Novatek has entered into agreements with two Chinese companies under which they will acquire participating interest in Novatek’s Arctic LNG 2 project. 

Arctic LNG 2 project is a major liquefied natural gas development led by Novatek on the Gydan Peninsula, Russia. The project will be developed using offshore platforms in northern West Siberia.

Novatek announced on Thursday at the Second Belt and Road Forum for International Cooperation that China National Oil and Gas Exploration and Development Company (CNODC), a subsidiary of CNPC, and CNOOC had both signed binding agreements to enter the Arctic LNG 2 project.

Under these agreements, CNOCD and CNOOC will each acquire a 10% participation interest in Arctic LNG 2.

Commenting on the CNPC agreement, Leonid Mikhelson, Novatek’s Chairman of the Management Board, said: “The agreement is an important milestone in our Arctic LNG 2 project implementation as well as a continuation of our successful cooperation with CNPC.”

Commenting on Novatek’s agreement with CNOOC, Mikhelson stated: “We are very glad that CNOOC has joined our Arctic LNG 2 project as our new partner, since China represents one of the key consuming markets for our LNG sales.”

The Arctic LNG 2 project envisages constructing three LNG trains at 6.6 million tons per annum each, using gravity-based structure (GBS) platforms. The Project is based on the hydrocarbon resources of the Utrenneye field. As of 31 December 2018, the Utrenneye field’s 2P reserves under PRMS totaled 7,981 million barrels of oil equivalent. Under the Russian classification reserves totaled 13,835 million barrels of oil equivalent. OOO Arctic LNG 2 owns an LNG export license.

Back in March, another company entered the Arctic LNG 2 project. Namely, French Total signed definitive agreements with Novatek for the acquisition of a direct 10% interest in Arctic LNG 2.

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