During the 19th International Conference & Exhibition on Liquefied Natural Gas (“LNG2019”) in Shanghai, Novatek Gas&Power Asia, a trading subsidiary of PAO NOVATEK and Vitol S.A. announced signing of Heads of Agreement for the supply of LNG.

The Agreement envisages concluding a 15-year contract with annual supply of one (1) million tons of LNG from the Arctic LNG 2 project as well as other NOVATEK’s projects. The LNG will be shipped on FOB basis to NOVATEK’s transshipment terminals in the Murmansk region and Kamchatka.

“We commenced contracting LNG volumes from our new project Arctic LNG 2,” noted NOVATEK’s First Deputy Chairman of the Management Board Lev Feodosyev. “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”.

Background

The Arctic LNG 2 project envisages constructing three LNG trains at 6.6 million tons per annum each, using gravity-based structure (GBS) platforms. The Project is based on the hydrocarbon resources of the Utrenneye field. As of 31 December 2018, the Utrenneye field’s 2P reserves under PRMS totaled 1,138 billion cubic meters of natural gas and 57 million tons of liquids. Under the Russian classification reserves totaled 1,978 billion cubic meters of natural gas and 105 million tons of liquids. OOO Arctic LNG 2 owns an LNG export license.