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No, The Oil Glut Hasn’t Disappeared

No, The Oil Glut Hasn’t Disappeared

Weaker than expected oil demand…

Russia’s Novatek Sells 20% In Arctic LNG 2 To Chinese Firms

Yamal LNG

 

Russian gas producer Novatek said on Thursday that it had signed agreements with two Chinese companies, under which the Asian firms will become shareholders in the Arctic LNG project with 10 percent each.

Novatek, the largest Russian producer and exporter of liquefied natural gas (LNG), signed an agreement with CNOOC and another deal with China National Oil and Gas Exploration and Development Company (CNODC), a wholly owned subsidiary of China National Petroleum Corporation (CNPC). CNOOC and CNODC will enter the Arctic LNG project with a 10-percent participation interest each.

“We are very glad that CNOOC has joined our Arctic LNG 2 project as our new partner, since China represents one of the key consuming markets for our LNG sales,” Leonid Mikhelson, Novatek’s Chairman of the Management Board, said in a statement.

“Arctic LNG 2 will be a game-changer in the global gas market, and our proven track record to successfully build an LNG facility in the Arctic zone, combined with a proven logistical model with access to prospective markets and large hydrocarbon resource base will ensure the successful implementation of this world class project,” according to Mikhelson.

Earlier this year, France’s Total, a partner of Novatek in the producing Yamal LNG project, signed a deal to buy a direct 10-percent interest in Arctic LNG 2. The project’s final investment decision (FDI) is expected to be made in the second half of 2019, with plans to start up the first liquefaction train in 2023, according to the French oil and gas major.

Related: Chevron And Occidental Start Bidding War For Anadarko

Earlier this month, Novatek signed a preliminary agreement with Vitol for supply from Arctic LNG.

“We commenced contracting LNG volumes from our new project Arctic LNG 2,” Novatek’s First Deputy Chairman of the Management Board, Lev Feodosyev, said in early April, adding that “LNG volumes sold at our transshipment terminals ensures the flexibility of LNG supplies around the world and allows us to create LNG hubs in the Asia-Pacific and Atlantic basins.”

While keeping a grip on the European gas market, Russia looks to boost LNG deliveries to the growing Asian market with storage hubs close to end-users to reduce freight costs and increase flexibility in deliveries.

By Tsvetana Paraskova for Oilprice.com

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