NOVATEK and ENN Natural Gas Sign Sales and Purchase Agreement on Long-Term LNG Supply
PAO NOVATEK (“NOVATEK” and/or the “Company”) announced today that its wholly owned subsidiary, NOVATEK Gas & Power Asia Pte. Ltd., and ENN LNG (Singapore) Pte. Ltd., a subsidiary of ENN Natural Gas Co., Ltd. (“ENN Natural Gas”) signed a long-term LNG sale and purchase agreement (“SPA”) for the LNG produced from the Arctic LNG 2 project.
The SPA stipulates the supply of approximately 0.6 million tons of LNG per annum from the Arctic LNG 2 project for a term of 11 years. The LNG will be delivered on a DES basis to ENN’s Zhoushan LNG Receiving Terminal in China.
“We have reached another milestone in successful marketing of NOVATEK’s share of LNG to be produced by our Arctic LNG 2 project,” noted Leonid Mikhelson, NOVATEK’s Chairman of the Management Board. “This is another LNG SPA for delivery to the Chinese market, which is in line with our LNG strategy to expand sales to the Asia-Pacific region with its growing demand for clean-burning natural gas.
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%).