CEO: Novatek sees Yamal LNG plant output at 19 mln tns in 2021

BELOKAMENKA, Murmansk Region, Oct 18 (PRIME) -- Russian gas giant Novatek expects liquefied natural gas (LNG) output of the Yamal LNG plant to amount to 19 million tonnes in 2021, Leonid Mikhelson, head of Novatek, said at a forum on Monday.

“Last year we produced 18.8 million tonnes while this year it will be more than 19 million tonnes,” Mikhelson said.

Novatek launched the fourth production line at the Yamal plant, featuring Novatek’s know-how LNG liquefaction technology, the Arctic Cascade, earlier in 2021. This year the fourth line will secure output of 200,000 tonnes of LNG, about 20% of its total capacity, Mikhelson said.

With the launch of the 4th production line, the facility will be able to produce up to 20 million tonnes of LNG annually, he said.

“I think we will produce more than 20 million tonnes (in 2022), Mikhelson said.

Mikhelson also said that supplies from the Yamal plant under long-term contracts are 60-67% cheaper than the spot prices on the TTF hub in Europe and the Asian JKM index. According to Mikhelson, this year shipments via the Northern Sea Route to Asia will reach a record, increasing 30% on the year.

At the same time, new long-contracts with Europe are a no-go for Novatek’s counterparts amid the energy crisis caused by the gas prices rocketing over the last few months.

“No one has reached out to Novatek from Europe,” Mikhelson said.

The output capacity of the LNG plant Cryogas-Vysotsk, Leningrad Region, will increase by 20%, to 800,000 tonnes of LNG per year, at the turn of 2023–2024, Mikhelson said.

Novatek also hopes to take an investment decision on the Ob GHK, where blue ammonia and hydrogen will be produced, together with a project to capture and bury 5.2 million tonnes of CO2 on Yamal, in early 2022.

“We are engaging western companies, Schlumberger and Halliburton, for international certification (for CO2 disposal),” Mikhelson said.

Mikhelson noted that the CO2 emissions of the Yamal plant are among the lowest in the world.

The pool of the Arctic LNG-2 project financing participants has been fully formed, with no Western investors joining. Financing of the project will be completed by the end of 2021, he said.

On Sunday, the company received licenses for the launch of the Neitinskoye and Arkticheskoye fields.

“We will try to launch these fields somewhere between 2026 and 2027,” Mikhelson said.

Novatek’s unit Yamal LNG Resources won the auctions for the two oil and gas fields in the Yamalo-Nenets Autonomous District in September, paying a total of 13.155 billion rubles.

Reserves of the fields are estimated at 2.9 billion barrels of oil equivalent, including 413 billion cubic meters of gas and 28 million tonnes of liquid hydrocarbons.

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