Russia's Novatek has announced that Yamal LNG has started producing liquefied natural gas (LNG) with the aim of shipping the first LNG train, with a capacity of 5.5 million tons per annum on the 8 December.
The first cargo loading is set for 8 December 2017 at the Arctic port of Sabetta using the first Arc7 ice-class LNG tanker named 'Christophe de Margerie’.
The Chairman of Novatek’s Management Board Leonid Mikhelson noted: "This event marks a milestone accomplishment for the Yamal LNG project. The commencement of LNG production begins a new chapter in our corporate history."
Samuel Lussac, Senior Research Manager, Russia Upstream Oil & Gas, Wood Mackenzie, said: "Despite challenging operating conditions, Yamal LNG was delivered on time and on budget. This is unusual in the LNG industry, where the projects often experience significant cost overruns or delays.
"With this first exported LNG cargo, scheduled for 8 December, Novatek, once a domestic gas supplier, becomes a global LNG player."
Lussac added: "Largely owing to its low-cost upstream base, Yamal LNG is competitive during the near-term global LNG oversupply. Even though an important milestone has been achieved, there are still risks associated with Yamal LNG performance and logistics. The plant’s first operating months will show whether the plant can operate smoothly in the harsh Arctic environment. Also, the Northern Sea Route transportation is in its early stages of development, and its feasibility as a major LNG delivery route is unclear."
The project is co-owned by France’s Total who has a 20 per cent stake, and China’s CNPC (20 per cent) and the Silk Road Fund (9.9 per cent).