Total eyes stake in Arctic LNG-2

31 August 2017, Week 34, Issue 946

French major Total is interested in participating in Novatek’s second LNG scheme on Russia’s Arctic coast, according to reports.


The print edition of La Gazette de L’Eco Economie reported on August 23 that Total was open to an equity position in the Arctic LNG-2 project, which is being planned by Novatek on the Gydan Peninsula. Construction of the plant could start in 2019, with its first production train coming on line in 2023, the paper said, adding that total costs were estimated at around US$10 billion.

Total is already a 20% stakeholder in Novatek’s flagship Yamal LNG project, which lies on Russia’s northern peninsula of Yamal, on the opposite side of the Gulf of Ob to Arctic LNG-2. The plant’s first 5.5 million tpy train is slated for launch later this year, with production set to reach 16.5 million tpy by 2019. Arctic LNG-2 is predicted to command approximately the same output in its first of three production phases.

Like Yamal LNG, Arctic LNG-2’s output is expected to be sold to European and Asian buyers. The former project has already pre-sold all its production volumes under 15- and 20-year contracts.

Novatek has yet to confirm any other shareholders in the Arctic LNG-2 scheme, and when it plans to reach a final investment decision (FID) on the project. Earlier this year, however, Russian Energy Minister Alexander Novak revealed that Novatek had offered Saudi oil giant Saudi Aramco a role in the project. The Russian firm has also reported interest from Japanese and Chinese companies, including state-owned China National Petroleum Corp. (CNPC). Novatek’s largest shareholder, Leonid Mikhelson, previously said that the company was prepared to offer foreign firms up to 49% of equity in the project.

In May, Novatek signed an agreement with French group Technip, Germany’s Linde and the Russian Research and Design Institute for Gas Processing to design Arctic LNG-2’s gravity-based structures. The plant will sit on a trio of platforms, which will be held in place on the seabed. In July, reports surfaced that Italy’s Saipem had been designated the sub-contractor responsible for constructing these three platforms.

Joseph Murphy

Edited by

Joseph Murphy


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