PAO NOVATEK (“NOVATEK”) announced that China National Oil and Gas Exploration and Development Company Ltd (“CNODC”), a wholly owned subsidiary of China National Petroleum Corporation (“CNPC”), has signed a binding agreement to enter the Arctic LNG 2 project. The binding agreement, signed in the presence of Leonid Mikhelson, Chairman of the Management Board of NOVATEK, and Wang Yilin, Chairman of CNPC, provides for the acquisition by CNODC of a 10% participation interest in Arctic LNG 2.

“The agreement is an important milestone in our Arctic LNG 2 project implementation as well as a continuation of our successful cooperation with CNPC,” noted Leonid Mikhelson, NOVATEK’s Chairman of the Management Board. “We successfully launched the Yamal LNG project on budget and ahead of initial schedule as partners, which is a unique achievement in the global gas industry. The accumulated experience of working together is a solid basis for the successful implementation of our new LNG project”.

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.