Russia’s Novatek Equips its LNG expansion (Update)
(Adds news of upstream agreement with Gazprom Neft)
Novatek signed June 6 strategic memoranda with equipment suppliers as the Russian independent prepares to continue its rapid development of Arctic gas projects.
The agreements with pipe maker TMK and investment house Severgroup were inked at the Saint-Petersburg International Economic Forum, the Kremlin’s annual international business and politics flagship event.
The documents outline the basic terms with TMK for the supply of casing and tubing. The agreement will help Novatek’s “plans to implement large-scale projects in the Arctic region and maximize the participation of Russian producers,” the company said in a statement.
The deal with the Severgroup investment group outlines the basic terms for the supply of materials and equipment for Novatek’s projects, including equipment for gas liquefaction trains. The company is anxious to foster Russian liquefaction technology to save costs and to protect it from sanctions.
“Our development strategy involves implementing large-scale LNG projects in the Arctic region with the participation of Russian equipment and materials manufacturers,” noted Novatek chairman Leonid Mikhelson. “The memorandum expands our mutually beneficial cooperation with Severgroup, contributing to the development of technologies for the LNG industry in Russia.”
Novatek also signed an agreement of intent on Arctic projects in a joint venture with state Gazprom Neft. "Gazprom Neft has been our reliable partner for many years. Together, we successfully launched our joint venture Arcticgas, which offered unique challenges in developing deeper producing horizons,” said Novatek CEO Leonid Mikhelson. “Our experience of working together creates a solid base for expanding our mutually beneficial co-operation in the Arctic zone.”
Novatek has boosted its profile with a strong push to export LNG from projects in the far east and Arctic since the Yamal LNG project, with three trains each of 5.5mn mt/yr, went online in 2017. It hopes to reach an FID on the Arctic 2 LNG project by the third quarter of 2019, and last month said it plans to raise its target for LNG production capacity to 70mn mt/yr by 2030, from the current 57mn mt/yr.
Gazprom Neft was formed from the oil assets formerly owned by Roman Abramovich's Sibneft.