Arctic LNG 2

The Arctic LNG 2 will be a major step for the Russian LNG market.
In 2018 Russia was responsible for 8% of the global LNG market.
The country aim to increase that to 20% by 2035.
The Arctic LNG 2:

• Location: offshore near the remote Gydan Peninsula in northern West Siberia.
• Facility: consist of 3 production trains, and is designed to produce 19.8 million tons of LNG annually.
• This is the 2nd large-scale LNG project led by NOVATEK, after Yamal LNG.

The Utrenneye field is the resource base for Arctic LNG 2.
The field is located in the Gydan Peninsula in YNAO approximately 70 km across the Ob Bay from Yamal LNG.

The project has very low upstream costs with the development of the giant resources from the Utrenneye field.
The installation of 3 concrete gravity-based structures in the Gulf of Ob on each of which will be located a 6.6 Mt/y liquefaction train will contribute to significant capex reduction (more than 30% per ton of LNG) compared to Yamal LNG.

NOVATEK aims to substantially reduce construction costs, from $27 billion for Yamal LNG to $21.3 billion for this new project.

Also, the close proximity to Yamal LNG will allow Arctic LNG 2 to leverage synergies with existing infrastructure and logistics facilities.

Arctic LNG 2 production will be delivered to international markets by a fleet of ice-class LNG carriers that will be able to use the Northern Sea Route and the transshipment terminal in Kamchatka for cargoes destined for Asia and the transshipment terminal close to Murmansk for cargoes destined for Europe.

Despite the impact of COVID-19, the Project’s participants managed to meet the schedule in all areas.
Currently, the overall progress for the Project is estimated at 19%, with concrete casting of the 1^st GBS platform estimated to be completed by 37%.

The module fabrication yards are working at full capacity.
Contractors under construction/EPC contracts are fully mobilized, and supply contracts have been signed and are being fulfilled.
9 production wells have already been drilled at the Utrenneye field with 3 drilling rigs in operation.

NOVATEK holds a 60 % stake in the project, while its partners Total, Chinese CNPC and CNOOC and a Japanese consortium each hold 10 %.
NOVATEK had also solicited investments from Saudi Arabia and India, among others.

Arctic LNG 2 is scheduled to open at the end of 2022 with the 2^nd and 3^rd production lines to follow in 2024 and 2026.