PAO Novatek wholly owned subsidiary Novatek Gas & Power Asia Pte. Ltd., has signed heads of agreement with Zhejiang Energy Gas Group Co. Ltd. and Glencore PLC for long-term supply of LNG from Novatek’s planned 19.8-million tonne/year (tpy) Arctic 2 LNG plant.
The agreement with Zhejiang Energy builds on the MOU signed by the parties in October 2019 and establishes commercial terms for the supply of up to 1 million tpy for 15 years. LNG will be delivered on a delivered ex-ship basis to Zhejiang Energy’s LNG terminals in China.
Novatek’s agreement with Glencore was for long-term supply of more than 0.5 million tpy from Arctic LNG 2. The LNG will be delivered to East Asia via the Northern Sea route.
Arctic LNG 2 will use three 6.6-million tpy liquefaction trains. It will also produce 1.6 million tpy of gas condensate.
At the end of first-quarter 2021, Novatek estimated overall progress for Arctic LNG 2 at 39%, with the first train roughly 63% completed. The full plant is expected to enter service in 2024, with deliveries from Train 1 expected the year before.
Earlier this year the OOO Arctic LNG 2 joint venture completed 20-year sales agreements with each of the project’s participants (OGJ Online, Apr. 28, 2021). The agreements reached by Novatek would come out of its share of the plant’s production. Project participants include: Novatek (60%), TotalEnergies SE (10%), China National Petroleum Corp. (10%), China National Offshore Oil Corp. (10%), and the Japan Arctic LNG consortium of Mitsui & Co. Ltd. and Japan Oil, Gas, and Metals National Corp. (10%).
