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GLNG: Novatek signs Arctic LNG 2 supply agreements with two Chinese firms

Russia’s Novatek announced on January 11 that it had struck separate long-term supply agreements with two Chinese companies – Zhejiang Provincial Energy Group and ENN Natural Gas.
Both deals entail LNG being supplied from Novatek’s Arctic LNG 2 project, which is under construction and scheduled to start production in 2023.
Novatek’s sales and purchase agreement (SPA) with Zhejiang builds on a heads of agreement (HoA) signed between the two companies in June 2021. It entails the supply of up to 1mn tonnes per year (tpy) of LNG on a delivered ex ship (DES) basis over a period of 15 years.
Meanwhile, Novatek’s SPA with ENN involves the supply of 600,000 tpy of LNG over an 11-year period, also on a DES basis. That LNG will be delivered to ENN’s Zhoushan LNG receiving terminal in China, while the LNG that is due to be delivered to Zhejiang will go to more than one of the company’s 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,” stated Novatek’s chairman of the management board, Leonid Mikhelson, in the announcement about the ENN deal. “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.”