Novatek Closes LNG 2 Transaction with Chinese, Japanese Firms

Russian natural gas producer PAO Novatek has closed the previously announced sale of minority stakes in Arctic LNG 2 Project to Chinese and Japanese companies.

As informed, the company closed the transactions involving a subsidiary of China National Petroleum Corporation (CNPC), a subsidiary of China National Offshore Oil Coporation (CNOOC), and the consortium of Mitsui & Co and Japan Oil, Gas and Metals National Corporation (Japan Arctic LNG).

CNPC and CNOOC units each acquired a 10 percent stake under the agreements signed at the Second Belt and Road Forum for International Cooperation held in Beijing in April 2019.

Two months later, the Japanese consortium signed a sales and purchase agreement with Novatek for a 10 percent interest in the project.

“We now have formed the structure of the project’s participants by successfully closing the sale of interests in Arctic LNG 2,” Leonid Mikhelson, Novatek’s Chairman of the Management Board, commented.

“The target level of Novatek’s participation has been reached, allowing us to make the final investment decision and optimally use the company’s cash flow to finance our new projects”.

The Arctic LNG 2 project envisages constructing three LNG trains at 6.6 million tons per annum each, using gravity-based structure (GBS) platforms. The project is based on the hydrocarbon resources of the Utrenneye field.

The project participants now include Novatek (60%), Total (10%), CNPC (10%), CNOOC (10%) and the Japan Arctic LNG (10%).