PAO NOVATEK announced that its wholly owned subsidiary, NOVATEK Gas & Power Asia Pte. Ltd., and ENN LNG (Singapore) Pte. Ltd., a subsidiary of ENN Natural Gas and Zhejiang Energy Gas Group Co., Ltd, a subsidiary of the Zhejiang Energy signed a long-term LNG sale and purchase agreement (“SPA”) for the LNG produced from the Arctic LNG 2 project.
The SPA stipulates the supply of approximately 0.6 million tons of LNG per annum from the Arctic LNG 2 project for a term of 11 years. The LNG will be delivered on a DES basis to ENN’s Zhoushan LNG Receiving Terminal in China.
The SPA follows on from the Heads of Agreement signed by parties on 2 June 2021 during the Saint-Petersburg International Economic Forum, and stipulates the supply of up to one (1) million tons of LNG per annum from the Arctic LNG 2 project for a term of 15 years. The LNG will be delivered on a DES basis to Zhejiang Energy’s LNG terminals in China.
“We have reached another milestone in successful marketing of NOVATEK’s share of LNG
to be produced by our Arctic LNG 2 project,” noted Leonid Mikhelson, NOVATEK’s
Chairman of the Management Board. “This is another LNG SPA for delivery to the Chinese
market, which is in line with our LNG strategy to expand sales to the Asia-Pacific region with its growing demand for clean-burning natural gas.”
Arctic LNG 2 envisages constructing three LNG liquefaction trains of 6.6 million tons per
annum each for the total LNG capacity of 19.8 million tons, as well as cumulative gas
condensate production capacity of 1.6 million tons per annum. The Project will utilize an
innovative construction concept of 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 31 December 2020, the Utrenneye field’s 2P reserves under PRMS totaled 1,434 billion cubic meters of natural gas and 90 million tons of liquids.
The Project’s participants include: NOVATEK (60%), TotalEnergies (10%), CNPC (10%),
CNOOC (10%) and Japan Arctic LNG, a consortium of Mitsui & Co, Ltd. and JOGMEC
(10%).
