Total, Novatek and other project shareholders have announced the launch of Arctic LNG 2, a major LNG development in Russia. The project is expected to have a production capacity of 19.8 million tonnes per year and will be exporting its first LNG cargo by 2023.
Paris/France – Total, Novatek and the other project shareholders have approved the final investment decision (FID) for Arctic LNG 2, a major liquefied natural gas (LNG) development located on the Gydan peninsula, Russia. The project will have a production capacity of 19.8 million tonnes per year (Mt/y) and is expected to export its first LNG cargo by 2023, the second and third train to start up by 2024 and 2026.
Total has a direct 10 % interest in Arctic LNG 2 alongside Novatek (60 %), Cnooc (10 %), CNPC (10 %) and a Mitsui-Jogmec consortium, Japan Arctic LNG (10 %). Total also owns an 11.6 % indirect participation in the project through its 19.4 % stake in Novatek, thus an aggregated economic interest of 21.6 % in the project.
“Arctic LNG 2 will leverage the success of the Yamal LNG project and will deliver competitive LNG to the markets in four years’ time,” commented Patrick Pouyanné, Chairman and CEO of Total. “Arctic LNG 2 adds to our growing portfolio of competitive LNG developments based on giant low cost resources primarily intended for the fast growing Asian markets.”
The project has very low upstream costs with the development of giant resources from the Utrenneye onshore gas and condensate field. The installation of three concrete gravity-based structures in the Gulf of Ob, on each of which a 6.6 Mt/y liquefaction train will be located, will contribute to significant capex reduction (more than 30 % per tonne of LNG) as compared to Yamal LNG. Also, the close proximity to Yamal LNG will allow Arctic LNG 2 to leverage synergies with existing infrastructure and logistics facilities.
Arctic LNG 2 production will be delivered to international markets by a fleet of ice-class LNG carriers that will be able to use the Northern Sea Route, the transshipment terminal in Kamchatka, as well and the transshipment terminal close to Murmansk.