Novatek Inks Kamchatka LNG Facility Deal

Russian independent gas producer Novatek has signed a co-operation agreement with the Kamchatka government, in Russia's Far East, relating to  building a sea terminal facility for reloading LNG, it said October 23.

The agreement obliges them to create favourable economic and organisational conditions to build the facility for reloading LNG from Arctic ice-class tankers to conventional LNG tankers on the east coast of the Kamchatka Peninsula. This will optimise 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, said Novatek CEO Leonid Mikhelson.

The agreement will facilitate the development of transport infrastructure, trading, economic, research and technology ties in Kamchatka, create additional jobs in the region, and also create conditions for Kamchatka’s gasification, using the boil-off gas from the reloading terminal to generate power and support utility industries on the Kamchatka Peninsula.

Novatek already has a transshipment terminal capacity agreement with Belgian Fluxys, allowing cheaper vessels to offload LNG from Zeebrugge and carry it to market, allowing Novatek to use its high-cost winterised LNG tankers where they are needed, in the (often) frozen northern waters.

William Powell