Novatek, Sovcomflot form LNG shipping JV

Novatek, Russia’s natural gas producer and LNG major, has signed a heads of agreement on creating a joint venture with its compatriot shipper Sovcomflot.

According to the agreement, the parties intend to create a shipping company, with the potential involvement of other joint venture participants, Novatek’s statement reads.

The joint venture will focus on managing the construction and operations of Arctic ice-class LNG carriers ensuring the optimized transportation from Novatek’s future LNG projects in the Russian Arctic region, including the Arctic LNG 2 project.

“The efficient development of the Northern Sea Route as a viable, year-round navigational route requires consolidating experience in ice navigation, applying new technological solutions, and implementing the best international standards for navigational safety and training,” noted Novatek’s head Leonid Mikhelson.

“An optimized model of transporting LNG from the Russian Arctic region via the Northern Sea Route to major global markets, including the Asia-Pacific region, will support the successful implementation of Novatek’s Arctic LNG projects as well as reaching the goal set by the Russian President to ensure an increase in annual cargo traffic along the Northern Sea Route to 80 million tons in 2024,” Mikhelson said.

The heads of agreement to create a joint venture follows the strategic agreement signed in June last year on transporting LNG and condensate from the Arctic LNG projects.