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Total to Sign Arctic LNG 2 Deal With Novatek

Total to Sign Arctic LNG 2 Deal With Novatek Total to Sign Arctic LNG 2 Deal With Novatek

France's Total is expected to sign a deal with Russia's Novatek to enter the Arctic LNG 2 project, the Kremlin said in a note ahead of the meeting of French President Emmanuel Macron and Russian President Vladimir Putin in St Petersburg.

"A deal on Total entering a new gas production and liquefaction project, Arctic LNG 2, is planned for signing," the Kremlin said in the note, Platts reported.

Total has a 20% stake in Novatek's first LNG plant, Yamal LNG, launched late last year, and has repeatedly said it would be interested in cooperating on the Russian company's second LNG project.

Arctic LNG 2, a 19.8 million-ton-per-year LNG plant planned for construction on the Gydan Peninsula, across the bay from Yamal LNG on the Bay of Ob in the Russian Arctic, is expected to launch its three 6.6 million-ton/year trains between 2022 and 2025, according to Novatek.

The deal signing is expected after Putin's talks with Macron at the St. Petersburg International Economic Forum, which will take place Thursday-Saturday, Russian presidential aide, Yuri Ushakov, specified, as quoted by the Prime news agency.

The signing is so far expected on Thursday, a source close to one of the companies told S&P Global Platts. Novatek and Total declined to comment on the issue.

Besides Total, China's CNPC, which also holds 20% in Yamal LNG, and Saudi Aramco have expressed interest in Arctic LNG 2, Novatek CEO Leonid Mikhelson said in February.

Yamal LNG shareholders also include China 's Silk Road Fund with 9.9%, with Novatek holding 50.1%.

Novatek plans to attract new shareholders into Arctic LNG 2 after completing front end engineering and design by the end of 2018, Mikhelson said at the time, adding that the company will offer "somewhat different conditions" compared with Yamal LNG, due to the greater value of the project and minimized risks after the first project launched on time and on budget.

Yamal LNG, which so far operates only the first 5.5 million tons per year train, is expected to reach the full 16.5 million tons per year capacity once the next two trains come on stream by the end of 2019.

 

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