Total due stake in Novatek’s Arctic LNG 2

Total SA has signed an agreement with Novatek to acquire a 10% participation interest in the Russian company’s 19.8 million-tonne/year Arctic LNG 2 project on northern Siberia’s Gydan Peninsula.

Novatek plans three liquefaction trains with combined capacities of 19.8 million tpy of LNG from gas produced at Utrenneye gas and condensate field. The trains will be installed atop gravity-based structures in the Gulf of Ob.

The site is across the gulf from Novatek’s Yamal LNG plant, the first 5.5-million-tpy train of which started up late last year (OGJ Online, Dec. 6, 2017).

Total is a 20% partner in Yamal LNG and holds a 19% stake in Novatek. Through its acquired interest and holding in Novatek, Total will have an effective interest of 21.5% in Arctic LNG 2 if Novatek retains its 60% share.

If Novatek decides to reduce its interest in the project, Total will be able to increase its direct share to as much as 15%.

The companies also agreed that Total will have the opportunity to acquire 10-15% direct interests in future Novatek LNG projects on the Yamal and Gydan Peninsulas.

The companies plan to make a final investment decision about Arctic LNG 2 next year, targeting start-up of the first train by the end of 2023.

Utrenneye field has reserves, based on the Russian classification system, of 1.582 billion cu m of natural gas and 65 million tonnes of liquids.