Russian independent gas producer Novatek has signed a heads of agreement (HoA) with the global trading company Vitol for the supply of 1 Mt/year of LNG from Arctic LNG 2 over a 15-year period, which will be shipped on a free-on-board (FOB) basis. In addition, Novatek has signed a non-binding HoA with the Spanish oil and gas company Repsol for the supply of 1 Mt/year of LNG over 15 years from the Arctic LNG 2 project. The LNG will be shipped ex-ship primarily to markets on the Iberian Peninsula.
Arctic LNG 2 is being developed on the Gydan Peninsula in the Russian Arctic region by Novatek. The group is considering reducing its share in the project to 40%. In May 2018, Total, which already owns a 19% stake in Novatek and takes part to its Yamal LNG plant in Russia, committed to acquire a 10% working interest in the Arctic LNG-2 project. The project has also attracted interest from international investors, such as CNPC, Kogas and Japanese investors. Upon completion, Arctic LNG 2 will consist of three liquefaction trains of 6.6 Mt/year capacity each, with a total capacity of approximately 19.8 Mt/year. The final investment decision could be made as early as mid-2019, with the first train expected to start up by the end of 2023. Arctic LNG 2 will unlock 2P reserves of 1,138 bcm of gas and 57 Mt of liquids from the onshore Utrenneye gas and condensate field.