The Heads of Agreement envisages concluding a 15-year contract with annual supply of one million tons of LNG from the Arctic LNG 2 project as well as other NOVATEK’s projects. The LNG will be delivered ex-ship primarily to markets on the Iberian Peninsula.
“The agreement for the sale of LNG would allow us to increase our market presence on the Iberian Peninsula where Russian pipeline gas is not supplied,” noted NOVATEK’s First Deputy Chairman of the Management Board Lev Feodosyev. “Expanding our supply geography and diversifying our long-term contract customer base is consistent with the Company's strategy to ramp up LNG production in the Russian Arctic.”
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. As of 31 December 2018, the Utrenneye field’s 2P reserves under PRMS totaled 1,138 billion cubic meters of natural gas and 57 million tons of liquids. Under the Russian classification reserves totaled 1,978 billion cubic meters of natural gas and 105 million tons of liquids. Arctic LNG 2 owns an LNG export license.