The first train at Novatek’s 20mn tonne-per-year (tpy) Arctic LNG-2 project is still on track to start up in December next year, while the second and third trains should come online in 2024 and 2026 as initially planned, a project director told reporters on December 12, according to bne IntelliNews.
There have been heightened concerns about whether the timeframe for Arctic LNG-2’s development will be revised in light of Western sanctions, although Novatek and Russian authorities have insisted that there are no changes to the existing plan.
“The goal is to launch … in December 2023,” the deputy general director for capital construction at Novatek’s Arctic LNG-2 subsidiary, Timofey Sazonov, told reporters. “[The second and third stages] – in 2024 and 2026. We are not reconsidering [deadlines].
One of the key buyers of Arctic LNG-2’s gas will be Japan, which is set to receive 2mn tpy from the facility.
“This project is developing successfully. We hope that next year Japan will receive additional volumes of Russian LNG, in addition to what is already supplied from Sakhalin-2,” Russian Ambassador to Tokyo Mikhail Galuzin said this month. Russia and Japan have areas “for mutually beneficial co-operation,” including the energy sphere, he said.
Overall supplies from Russia to Japan will reach 5-6mn tpy following Arctic LNG-2’s launch, according to Galuzin.
Novatek CEO Leonid Mikhelson said in October that Arctic LNG-2 had reached 70% completion.
“Of course, sanctions have affected us. We have made efforts not only in terms of the industry and the engineering solutions, but we have also managed to obtain the main equipment for all the three trains of the Arctic LNG-2 project, and we have found technological solutions to prevent the delay,” he said at that time. “We have got a window of about three years for localisation and for resolving the issue with three or four items of equipment. I am sure we will settle it within three years. Perhaps, that will require some money, but if everything continues … it will pay off three or four times.”
TotalEnergies, one of Novatek’s partners at Arctic LNG-2, has said it will phase down its Russian operations in response to Moscow’s invasion of Ukraine. Various other international technology providers, equipment suppliers, contractors and financiers have also cut ties with the development.
Mikhelson also said that Novatek aimed to take a decision on future projects next year. One of its prospective developments is Arctic LNG-1, which like Arctic LNG-2, will be situated on the Gydan Peninsula.
Arctic LNG-1 received a boost this week, with Novatek reporting on December 12 the discovery of a new gas and condensate field to add to the project’s resources.
The discovery was made at the Bukharinsky licence area, situated next to the Trekhbugorny block, and its size is estimated at 52bn cubic metres of gas and 2mn tonnes of liquids. It has been named Viktor Girya, after a geologist who was among the company’s founders.
Arctic LNG-1 will be similar in scope to Arctic LNG-2, with a capacity of around 20mn tpy.
“With this discovery, the company will expand its resource base on the Gydan Peninsula with the view to subsequently putting the field into efficient production under the development of its prospective projects,” Novatek said in a statement.