Novatek, Kamchatka Agree on $1bn LNG Depot

Russian independent gas producer Novatek, the ministry for the development of Russia's far east, and the regional government of Kamchatka - one of Russia's far east regions - have signed an agreement of intent to build a marine LNG transshipment complex in the remote ice-clad territory of Kamchatka. 

No indication of the size of the plant was given, but the agreement envisages Novatek spending about rubles 70bn ($1bn). The government will also support the project which will provide energy to the region as well. According to some industry sources it would be enough to hold three or four tankers' worth of LNG, or about 600,000 m³ (375,000 metric tons), with the LNG to be reloaded almost simultaneously on to conventional vessels.

“The construction of the Kamchatka transshipment complex will increase the efficiency of LNG deliveries from the Arctic zone by optimising transport logistics,” said Novatek CEO Leonid Mikhelson. "We plan to create a Russian LNG hub for shipments to consumers in the Asia-Pacific region. This investment will contribute to the development of the Northern Sea Route allowing for the optimal use of the existing Arctic tanker fleet. The project will give an additional impetus to the economy of the Far East, create additional jobs and facilitate gasification of Kamchatka by using the boil-off gas from the LNG transshipment complex.”

In June, Novatek signed a deal with South Korean importer Kogas  whereby the latter – in addition to possibly entering the more significant Arctic LNG 2 project (offshore western Siberia) and possibly buying some of the output – might also participate in the Kamchatka LNG transshipment project. And as long ago as late 2017, Novatek signed a memorandum of understanding with Japan's Marubeni Corp and Mitsui OSK Lines that discussed this Kamchatka project.

Kamchatka's location in the Russian Far East (Map credit: Wikipedia)