French oil and gas major Total inked an agreement with Russian LNG producer Novatek to acquire a direct working interest of 10% in Arctic LNG 2, the giant LNG project lead by Novatek on the Gydan Peninsula in the north of Siberia. The deal was signed in the presence of the President of the Russian Federation, Vladimir Putin, and the President of the French Republic, Emmanuel Macron.
Taking account of Total’s approximate 19% stake in Novatek and Novatek’s intention to retain 60% of the project, the Group’s overall economic interest in this new LNG project will be approximately 21.5%.
The parties have also agreed that Total will have the opportunity to acquire a 10 to 15% direct interest in Novatek’s future LNG projects, in Yamal and Gydan.
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 is expected to 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.
Total is also partner in the Yamal LNG project (20%), which began exporting liquefied natural gas in late 2017.
In the same way as for Yamal LNG, 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.
The final investment decision is expected in 2019, with plans to start up the first train by end 2023.
