Novatek, Glencore Ink Arctic LNG 2 Gas Supply Deal
Russian gas company Novatek has signed heads of agreement with Glencore for the long-term supply of LNG from the Arctic LNG 2 project.
The agreement, signed Wednesday at Saint-Petersburg
International Economic Forum, established the key commercial terms for the
long-term supply of more than of 0.5 million tons of LNG per year from the
Arctic LNG 2 project.
The LNG will be delivered to a number of locations in East
Asia, Novatek said.
Leonid Mikhelson, NOVATEK's Chairman of the Management Board
said: "The market for LNG in the Asia Pacific region has fully recovered
from the impact of the coronavirus pandemic and has now resumed a stable growth
phase.
"This agreement is consistent with NOVATEK's commercial
strategy to build a sustainable LNG sales portfolio including both end
customers and portfolio players in the Asia Pacific market, with LNG delivered
all-year-round along the Northern Sea Route."
The $21.3 billion Arctic LNG 2 project, sanctioned in 2019,
will develop the Utrenneye field on the Gydan Peninsula.
The Arctic LNG 2 project envisages constructing three LNG
liquefaction trains of 6.6 million tons per annum each for the total LNG
capacity of 19.8 million tons, as well as a cumulative gas condensate
production capacity of 1.6 million tons per annum.
The project will use an innovative construction concept of
offshore gravity-based structure (GBS) platforms to reduce overall capital cost
and minimize the project's environmental footprint in the Arctic zone of
Russia.
As of 31 December 2020, the Utrenneye field's 2P reserves
under PRMS totaled 1,434 billion cubic meters of natural gas and 90 million
tons of liquids. The Project's participants include NOVATEK (60%),
TotalEnergies (10%), CNPC (10%), CNOOC (10%), and the Japan Arctic LNG, a
consortium of Mitsui & Co, Ltd. and JOGMEC (10%).
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