Siemens, Novatek Ink Arctic LNG Deal

German engineering giant Siemens will supply the compression needed for three trains at Arctic LNG-2 in Russia's far north, the operator Novatek said February 1.

The contract includes three feed gas compressors and six boil-off gas compressors, with the equipment for the third train to be made in Russia.

“Siemens and Novatek have a successful working relationship as they supplied gas turbine generators and boil-off gas compressors for our Yamal LNG plant," Novatek said. “Our next project, Arctic LNG 2, will use new technological solutions and employ domestic manufacturers. The supply contract envisages new prospects for localising the compressor equipment fabrication for the LNG industry, which is consistent with our strategic aim of creating and developing an LNG Center of Excellence in Russia.”

A mix of sanctions and a weak ruble have forced Russian energy companies to source more of their high-tech materials domestically. This has benefited local companies such as linepipe manufacturers, which have expanded their intellectual property base while not apparently at the expense of progress on such ambitious projects as Gazprom's Power of Siberia, which is due to start exports to China late this year.

The modular Arctic 2 and subsequent LNG plants are also to be made in Russia, at a Murmansk "plant that makes plants." Yamal LNG is also by default Arctic 1 LNG and is fully operational. So far there has been no final investment decision or confirmation of the shareholders of Arctic 2.