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    Saudi Arabia Ready to Invest $5bn in Arctic LNG 2: Report

Summary

Saudi Arabia is ready to invest $5bn in Novatek’s Arctic LNG 2 project, according to the head of Russian Direct Investment Fund (RDIF), Kirill Dmitriev.

by: Shardul Sharma

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Saudi Arabia Ready to Invest $5bn in Arctic LNG 2: Report

Saudi Arabia is ready to invest $5bn in Novatek’s Arctic LNG 2 project, the head of Russian Direct Investment Fund (RDIF), Kirill Dmitriev, said at the Saudi Arabian investment forum October 23, according to RT.

Earlier this month Novatek CFO and deputy chairman, Mark Gyetvay, told the Oil & Money conference in London that Saudi Aramco was among those companies that have visited the data room for the planned Arctic LNG 2 project. Eight months ago Saudi Aramco and Novatek signed a memorandum of understanding that included possible LNG co-operation.

Last week Saudi energy minister, Khalid Al-Falih, who was speaking at the India Energy Forum hosted by CERAWeek in Delhi, said that Saudi Aramco is open to the idea of marketing some LNG from the proposed Arctic project into India and other markets.

In May French firm, Total, agreed terms to buy a direct 10% stake in Arctic LNG 2. As Total owns some 19% of Novatek and the latter intends to retain 60% of the project, Total will end up with around 21.5% ownership of the project, but also has the right to buy up to 15% directly if Novatek sells under 60%. The French major also holds a 20% stake in Novatek’s Yamal LNG project, which is already operational.

Arctic LNG 2 will have production capacity of about 19.8mn mt/yr. The LNG will be shipped to international markets by a fleet of ice-class LNG carriers that will be able to use the Northern Sea Route for cargoes destined for Asia. The final investment decision is expected in 2019, with plans to start up the first train by end 2023.