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NOVATEK and Uniper Sign Term Sheet on Low-carbon Ammonia Supply

Moscow, 22 December 2021. PAO NOVATEK (“NOVATEK” and/or the “Company”) and Uniper SE (“Uniper”) signed a Term Sheet on long-term supply of up to 1.2 mln tons of low-carbon ammonia per annum to primarily German market. The product price will be indexed to relevant European and global benchmarks.

The Term Sheet details the terms of the supply by NOVATEK to Uniper of low-carbon ammonia to be produced at the Company’s planned Obskiy GCC (Gas Chemical Complex) project, which will include carbon capture and storage (CCS) facilities, and delivered to Uniper’s planned ammonia import terminal in Wilhelmshaven, equipped with an ammonia cracker operating with renewable power.

The imported low-carbon ammonia will be used as hydrogen carrier, transformed into gaseous hydrogen and fed into the future German hydrogen pipeline system, as well as supplied directly as a clean feedstock and as a fuel. Signing of the Term Sheet progresses large-scale cooperation based on the MOU signed earlier by the Parties in January 2021.

“Our strategy pays significant attention to clean energy supplies, and we consider ammonia as the most efficient hydrogen carrier for seaborne transportation,” said Leonid Mikhelson, Chairman of NOVATEK's Management Board. “We are now at the pre-FEED stage for a low-carbon ammonia and hydrogen plant with CCS facilities, and signing of term sheets for long-term supply demonstrates growing demand for low-carbon products, which is an essential precursor for the Final Investment Decision on this project. The plant will be located next to our LNG cluster in Yamal in order to minimize the infrastructure costs and provide the most competitive clean energy supplies to the global market”.

PAO NOVATEK is one of the largest independent natural gas producers 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. Upstream activities of the Company’s subsidiaries and joint ventures are concentrated mainly in the prolific Yamal-Nenets Autonomous Area, 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.