Arctic LNG-2 Project Gets Green Light
The final investment decision at the Novatek-led Arctic LNG-2 project was announced September 5.
Novatek and other partners in the project signed the protocol on the sidelines of the Eastern Economic Forum in Vladivostok, the Russian energy ministry said in a statement. Novatek holds a 60% stake in the project, French Total, CNPC subsidiary China National Oil and Gas Exploration and Development and CNOOC each hold 10% stakes. Japan's Mitsui and Jogmec jointly hold a 10% interest in the project.
Total also owns an 11.6% indirect participation in the project through its 19.4% stake in Novatek, thus an aggregated economic interest of 21.6% in the project.
Total CEO Patrick Pouyanne said “Arctic LNG 2 will leverage the success of the Yamal LNG project and will deliver competitive LNG to the markets in four years’ time. Arctic LNG 2 adds to our growing portfolio of competitive LNG developments based on giant low cost resources primarily intended for the fast growing Asian markets.”
Russian energy minister Alexander Novak said the project was consistent with Russia's strategy to increase its share of the global LNG market. He said the project would require an investment of $21bn. “The joint implementation of this project will give an additional impetus to the development of our relations, including on other projects in the field of LNG,” Russian energy ministry statement quoted Novak as saying.
The Arctic LNG-2 project will comprise three LNG trains with capacity of 6.6mn mt/yr each. Its first train should start up in 2023, according to Novatek, whereas its second is scheduled to launch in 2024 and its third in 2026. More than 90% of long-lead items for the plant, such as cryogenic heat exchangers, gas turbines and compressors, have already been ordered, the company said on September 5. A consortium of London-based TechnipFMC, Italy's Saipem and Russia's Nipigas is serving as its engineering, procurement and construction (EPC) contractor.