April 2, 2019 / 8:51 AM / a year ago

Russia's Novatek signs non-binding deals for Arctic LNG 2 project

SHANGHAI/SINGAPORE, April 2 (Reuters) - Russian gas producer Novatek on Tuesday said it has signed two non-binding deals to supply liquefied natural gas (LNG) from its Arctic LNG 2 project.

Its trading subsidiary Novatek Gas and Power Asia announced during the LNG2019 conference in Shanghai the signing of a non-binding heads of agreement for LNG supply to Repsol, the company said in a statement on Tuesday.

The contract is for one million tonnes of LNG a year over 15 years from the Arctic LNG 2 project and other Novatek projects, the company said.

“The agreement for the sale of LNG would allow us to increase our market presence on the Iberian Peninsula where Russian pipeline gas is not supplied,” said Novatek’s first deputy chairman of the management board, Lev Feodosyev.

“Expanding our supply geography and diversifying our long-term contract customer base is consistent with the company’s strategy to ramp up LNG production in the Russian Arctic,” Feodosyev said in a statement.

Earlier on Tuesday, Novatek said its trading subsidiary signed a non-binding heads of agreement with energy trading firm Vitol SA for 1 million tonnes a year of LNG over 15 years.

LNG for the Vitol contract will be shipped on a free-on-board (FOB) basis to Novatek’s transhipment terminals in the Murmansk region and Kamchatka, the company said.

The Arctic LNG 2 project includes three LNG trains at 6.6 million tons per annum each.

A final investment decision to go ahead with the project is expected to be taken in the second half of 2019, with plans to start up the first liquefaction train in 2023. (Reporting by Meng Meng in SHANGHAI and Jessica Jaganathan in SINGAPORE; Editing by Tom Hogue)

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