Novatek’s joint venture Arctic LNG 2 has concluded 20-year LNG Sales and Purchase Agreements (SPAs) for the total LNG production volumes with all the project participants, the company has reported.
The LNG sales from Arctic LNG 2’s first liquefaction train is planned to commence in 2023.
The SPAs provide for LNG supplies from Arctic LNG 2 on FOB Murmansk and FOB Kamchatka basis with pricing formulas linked to international oil and gas benchmarks. The LNG offtake volumes are set in proportion to the respective participants’ ownership stakes in the project.
Arctic LNG 2 envisages constructing three LNG liquefaction trains of 6.6 million tons per annum each, as well as cumulative gas condensate production capacity of 1.6 mn tons per annum. The total LNG capacity of the three liquefaction trains will be 19.8 mn tons.
The project utilizes an innovative construction concept using gravity-based structure (GBS) platforms to reduce overall capital cost and minimize the project’s environmental footprint in the Arctic zone of Russia.
As of December 31, 2020, the Utrenneye field’s 2P reserves under PRMS totaled 1,434 bn cubic meters of natural gas and 90 mn tons of liquids.
The project participants are Novatek (60%), Total (10%), CNPC (10%), CNOOC Limited (10%) and the Japan Arctic LNG, consortium of Mitsui & Co., Ltd. and JOGMEC (10%).