Project Arctic LNG 2
Arctic LNG 2 is another LNG production-related project of NOVATEK
The project includes the construction of three LNG trains, with a capacity of 6.6 mtpa of LNG each. The total LNG capacity of the three trains will be 19.8 mtpa and about 1.6 mtpa of stable gas condensate. The project employs an innovative construction concept using gravity-based structures (GBS). OOO Arctic LNG 2 is the operator and owner of all the assets.
The Utrenneye field is the resource base for Arctic LNG 2. The field is located in the Gydan Peninsula in YNAO approximately 70 km across the Ob Bay from Yamal LNG.
In 2018, we completed the front-end engineering design (FEED) and started site preparation, construction of early phase power supply facilities, production wells drilling, and construction of the quayside.
The participants of Arctic LNG 2 approved a final investment decision (FID) for the project in September 2019. Capital expenditures to launch the project at full capacity is estimated at $21.3 billion equivalent.
The GBS design concept as well as extensive localization of equipment and materials manufacturing in Russia will allow to considerably decrease the CAPEX per ton of LNG produced under this project. This will ensure a low cost structure of products and maximum competitiveness across the LNG markets.
LNG Construction Center
To provide fabrication of the GBS, assembly and installation of topside modules, we are building the LNG Construction Center in Belokamenka near Murmansk. The Center comprises two dry docks to build GBS, and facilities to manufacture topside modules. It sets up a state-of-the-art LNG technical basis in Russia, create new engineering and fabrication jobs, and contribute to the economic development of the region.
- Decrease in LNG production CAPEX by using GBS
- Onshore conventional reserve base
- Low F&D and lifting costs
- Access to the Atlantic Basin and Asia-Pacific markets
- Front-end engineering design (FEED) was completed in October 2018.
- Final investment decision (FID) made in September 2019.
- EPC-contract with TechnipFMC was signed.
- More than 90% of equipment for the project was contracted.
- Сoncluded 20-year LNG Sales and Purchase Agreements for the total LNG production volumes with all the Project’s participants.
- The external financing package with a consortium of international and Russian banks secures the required external funding for the Project. The maximum aggregate loan amount under the facilities to be provided by the Russian and international banks is EUR 9.5 billion for up to 15 years.
- In June 2021, the first plane landed at the Utrenniy airport built specifically for the Arctic LNG 2 project on the Gydan Peninsula.
- At the end of 2021, the overall progress for Arctic LNG 2 is estimated at 59%, the first train is roughly 78% completed.
- As of December 31, 2021, about 57% of the total Project’s planned capital expenditures had already been financed.
- At the end of 2021, we have drilled a total of 56 production wells. Essentially, we have drilled and completed enough wells to start production at GBS #1.