Yamal LNG Enjoys Northern Route Boost

Leading Russian LNG exporter Novatek delivered 15 cargos from Yamal LNG to Asia-Pacific markets during the third quarter, all using the seasonally ice-bound Northern Sea Route (NSR), it said October 1. Tha was about a quarter of all deliveries over the period, it said. Overall, it expects four times as much LNG to go to Asia using the NSR this year than last year.

Yamal LNG, on Russia's arctic coast, is supported by a fleet of 13 Arc7 ice-class tankers along with lower ice-class designated tankers. The full complement of 15 Arc7 ice-class tankers are expected to be in operation by end of 2019, which will increase the number of direct LNG deliveries eastbound using the NSR from next year.

"The increase of LNG delivered eastbound via the NSR confirms the commercial priority of the Asia-Pacific region as a strategic direction for future deliveries of Novatek’s LNG,” noted Lev Feodosev, the deputy CEO. “Developing further the navigational efficiency via the NSR combined with the construction of LNG transhipment complexes in Kamchatka and Murmansk will optimise the company's logistics chain.”

Arc7 tankers are more expensive to run and so are better used for the arctic waters, while cheaper vessels then take the cargo further south through the Pacific to markets in Korea, Japan and elsewhere.

Novatek has also taken the final investment decision on a second LNG project, Arctic 2 LNG, which will be a little larger than Yamal LNG, which has three trains of 5.5mn mt/yr and a fourth, smaller train of 0.8mn mt/yr is planned this quarter.