Arctic LNG 2 contracts LNG for 20 years with shareholders

MOSCOW, Apr 28 (PRIME) -- Liquefied natural gas (LNG) producer Arctic LNG 2, a joint venture of Russian independent gas producer Novatek and foreign partners, has signed purchasing contracts with its shareholders for the entire LNG production capacity for the next 20 years, Novatek said in a statement on Wednesday.

“Novatek… announced today that its joint venture Arctic LNG 2 concluded 20-year LNG sales and purchase agreements for the total LNG production volumes with all the project’s participants. The LNG sales from Arctic LNG 2’s first liquefaction train is planned to commence in 2023,” the statement read.

Under the contracts, LNG will be delivered FOB Murmansk and FOB Kamchatka with the pricing formulas tied to the international oil and gas benchmarks. The contracts set the amounts of LNG supplies in proportion to the ownership in Arctic LNG 2, Novatek said.

The U.S. $27 billion Arctic LNG 2 plant will be launched in 2022–2025 with fields of the Gydan Peninsula in the north of West Siberia used as the resource base. The facility is expected to produce 19.8 million tonnes of LNG per year. Novatek owns 60% in the plant, while France’s Total has 10%, China’s CNOOC and CNODC have 10% each, and Japan Arctic LNG, a consortium of Japan’s Mitsui and JOGMEC, has 10%.

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