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NOVATEK and TOTAL Become Partners in Arctic LNG 2 Project
24 May 2018
Saint-Petersburg, 24 May 2018. At the 22nd Saint Petersburg International Economic Forum, in the presence of the President of Russia Vladimir Putin and the President of France Emmanuel Macron, Chairman of the Management Board of PAO NOVATEK (“NOVATEK”) Leonid Mikhelson and Chairman and Chief Executive Officer of TOTAL S.A. (“TOTAL”) Patrick Pouyanné signed a binding agreement on the terms to enter the Arctic LNG 2 project (the “Project”).
The agreement provides for the acquisition by TOTAL of a 10% participation interest in the Project as well as the right to acquire additionally up to 5% in case NOVATEK decides to decrease its participation interest in the Project below the currently planned 60%.
The transaction will be closed no later than 31 March 2019. The Project’s value is determined at 25.5 billion dollars.
“TOTAL is one of the leading global LNG players and a valued partner of NOVATEK with a long and successful track record of mutually beneficial cooperation. We welcome their participation in our Arctic LNG 2 project.” noted Leonid Mikhelson, NOVATEK’s Chairman of the Management Board, during the signing of the agreement, “Our prolific hydrocarbon resource base in the Yamal and Gydan peninsulas offers an unparalleled opportunity to participate in scalable LNG projects that will offer competitively priced LNG to key consuming markets. The entry of such a professional partner to Arctic LNG 2 already at an early stage confirms outstanding economic attractiveness and huge perspectives of LNG projects on the Yamal and Gydan peninsulas.”
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 2017, the Utrenneye field’s reserves under the Russian reserve classification totaled 1,582 billion cubic meters of natural gas and 65 million tons of liquids. OOO Arctic LNG 2 owns an LNG export license.
PAO NOVATEK is the largest independent natural gas producer in Russia, and in 2017, entered the global LNG market by successfully launching the Yamal LNG project. Founded in 1994, the Company is engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons. The Company’s upstream activities are concentrated mainly in the prolific Yamal-Nenets Autonomous Region, which is the world’s largest natural gas producing area and accounts for approximately 80% of Russia’s natural gas production and approximately 15% of the world’s gas production. NOVATEK is a public joint stock company established under the laws of the Russian Federation. The Company’s shares are listed in Russia on Moscow Exchange (MOEX) and the London Stock Exchange (LSE) under the ticker symbol “NVTK”.
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