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NOVATEK signs Arctic LNG 2 agreement with Shenergy Group

Published by , Assistant Editor
LNG Industry,

PAO NOVATEK has announced that its wholly owned subsidiary, NOVATEK Gas & Power Asia Pte. Ltd., and Shenergy Group signed have a long-term LNG sales and purchase agreement (SPA) for the LNG produced from the Arctic LNG 2 project.

The SPA stipulates the cumulative supply of more than 3 million t of LNG for a term of 15 years and will be delivered to LNG terminals in China on DES basis.

“Our LNG commercial strategy is to diversify our client base and target end consumers in the fast-growing Asian Pacific region, and the LNG volumes produced from our Arctic LNG 2 project is core to our long-term objective of delivering affordable, secure and sustainable natural gas for many decades,” noted Leonid Mikhelson, NOVATEK’s Chairman of the Management Board. “The Chinese market is one of the key regions in our LNG marketing strategy, and we plan to further increase our supplies of liquefied natural gas to this country.”

Arctic LNG 2 envisages constructing three LNG liquefaction trains of 6.6 million tpy each, as well as cumulative gas condensate production capacity of 1.6 million tpy. The total LNG capacity of the three liquefaction trains will be 19.8 million t. The Project utilises an innovative construction concept using gravity-based structure (GBS) platforms to reduce overall capital cost and minimise the project’s environmental footprint in the Arctic zone of Russia. As of 31 December 2020, the Utrenneye field’s 2P reserves under PRMS totalled 1434 billion m3 of natural gas and 90 million t of liquids.

Project participants include: NOVATEK (60%), TOTAL (10%), CNPC (10%), CNOOC (10%) and the Japan Arctic LNG, consortium of Mitsui & Co and JOGMEC (10%).

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