Novatek Clinches LNG Sales Deal with Shenergy

Russia's Novatek has signed a long-term contract with China's Shenergy to supply LNG from the Arctic LNG-2 project, due online in 2023.

The contract, signed by Novatek Gas & Power Asia, covers over 3mn metric tons of cumulative LNG supply over a 15-year period, Novatek said in a statement on February 25. This gas will be shipped to Chinese terminals on a delivered ex-ship basis. 

"Our LNG commercial strategy is to diversify our client base and target end consumers in the fast-growing Asian Pacific region, and the LNG volumes produced from our Arctic LNG-2 project is core to our long-term objective of delivering affordable, secure and sustainable natural gas for many decades," Novatek chairman Leonid Mikhselon said. "The Chinese market is one of the key regions in our LNG marketing strategy, and we plan to further increase our supplies of LNG to this country."

The Arctic LNG-2 project's three trains are due to start production in 2023, 2024 and 2026 and will produce 19.8mn mt/yr of LNG at full capacity. Novatek leads with the project with a 60% interest, while France's Total has 10%, Chinese firms CNPC and Cnooc have 10% shares and Japan's Mitsui and Jogmec a further 10%.