Total has signed an agreement with Novatek seeing the French oil giant acquire a direct working interest of 10 per cent in Arctic LNG 2, a giant liquefied natural gas project lead by Novatek on the Gydan Peninsula in the north of Siberia.
Novatek and Total have also agreed that Total will have the opportunity to acquire a 10 to 15 per cent direct interest in Novatek's future LNG projects in Yamal and Gydan.
In a statement Total said that taking account of its approximate 19 per cent stake in Novatek and Novatek’s intention to retain 60 per cent of the project, the Group's overall economic interest in this new LNG project will be approximately 21.5 per cent. Should Novatek decide to reduce its participation below 60 per cent, Total will have the possibility to increase its direct share up to 15 per cent.
The final investment decision is expected in 2019, with plans to start up the first train by end 2023.
“Total is delighted to be part of this new world class LNG project alongside its partner Novatek, leveraging the positive experience acquired in the successful Yamal LNG project. This project fits into our strategic partnership with Novatek and also with our sustained commitment to contribute to developing the vast gas resources in Russia’s far north which will primarily be destined for the strongly growing Asian market." said Patrick Pouyanné, Chairman and CEO of Total. “Arctic LNG 2 will contribute to our strategy of growth in LNG by developing competitive projects based on giant low costs resources.”
With a production capacity of approximately 19.8 million tons per year (Mt/year), or 535,000 barrels of oil equivalent per day (boe/d), Arctic LNG 2 will unlock more than 7 billion boe of hydrocarbons’ resources in the onshore Utrenneye gas and condensate field. The project will involve the installation of three gravity-based structures in the Gulf of Ob on which will be installed the three liquefaction trains of 6.6 Mt/year capacity each.
The Arctic LNG 2 production will be delivered to international markets by a fleet of ice-class LNG carriers that will be able to use the Northern Sea Route for cargoes destined for Asia.