- Mar 25, 2019
- LNG World Shipping
Novatek, one of the largest independent producers of natural gas in Russia, is considering selling a 30% share in the Arctic LNG 2 project to Saudi Aramco.
Novatek chief executive Leonid Mikhelson said he had discussed Saudi Aramco’s possible stake in the Arctic LNG 2 project with Saudi Arabia’s minister of energy, industry and mineral resources Khalid al-Falih, according to Tass.
France’s Total has taken a 10% interest in the project, which will be commissioned between 2022-2023 and have three liquefaction trains with a total capacity of 19.8M mta of LNG.
Total and Novatek have an ongoing relationship in LNG. Total has a 20% interest in the Yamal LNG project, with Novatek holding a 50.1% interest, China National Petroleum Corporation 20% and the Silk Road Fund the remaining 9.9% interest. Located above the arctic circle, where temperatures can dip to -50ºC, Yamal LNG leverages Russian onshore gas reserves from 200 wells in the Yamal Peninsula.
In 2018, the Yamal LNG project reached full capacity at 16.5 mta from its three liquefaction trains.
Back in October, front-end engineering and design work was completed on Arctic LNG 2, confirming preliminary cost estimates for the project between US$20-US$21Bn. Additional exploration drilling verified significant natural gas reserves at the project’s Utrenneye field of approximately 2Trn m3.
Saudi Aramco’s interest in the Arctic LNG 2 project is not unexpected. Already the leading global crude oil exporter, Saudi Aramco wants to transform itself into a major gas player by investing US$150Bn in natural gas over the next decade. Besides investing in domestic natural gas projects, Saudi Aramco is exploring investments in US LNG export facilities.