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NOVATEK and Zhejiang Energy Sign Sales and Purchase Agreement on Long-Term LNG Supply

1/11/2022

Novatek - Press release

PAO NOVATEK announced today that its wholly owned subsidiary, NOVATEK Gas & Power Asia Pte. Ltd., and Zhejiang Energy Gas Group Co., Ltd, a subsidiary of the Zhejiang Provincial Energy Group signed a long-term LNG sale and purchase agreement for the LNG produced from the Arctic LNG 2 project.

The SPA follows on from the Heads of Agreement signed by parties on 2 June 2021 during the Saint-Petersburg International Economic Forum, and stipulates the supply of up to one million tons of LNG per annum from the Arctic LNG 2 project for a term of 15 years. The LNG will be delivered on a DES basis to Zhejiang Energy’s LNG terminals in China.

Note:

Arctic LNG 2 envisages constructing three LNG liquefaction trains of 6.6 million tons per annum each for the total LNG capacity of 19.8 million tons, as well as cumulative gas condensate production capacity of 1.6 million tons per annum. The Project will utilize an innovative construction concept of gravity-based structure (GBS) platforms to reduce overall capital cost and minimize the Project’s environmental footprint in the Arctic zone of Russia. As of 31 December 2020, the Utrenneye field’s 2P reserves under PRMS totaled 1,434 billion cubic meters of natural gas and 90 million tons of liquids.

The Project’s participants include: NOVATEK (60%), TotalEnergies (10%), CNPC (10%), CNOOC (10%) and Japan Arctic LNG, a consortium of Mitsui & Co, Ltd. and JOGMEC (10%).