Novatek eyes LNG transshipments in Norway, Murmansk

Russian independent Novatek plans to perform LNG transshipments in Norway and nearby Murmansk in Russia's far north this winter.

Novatek expects to start transshipments by the end of October or beginning of November, when transit along the Northern Sea Route (NSR) will become unavailable because of ice, chief financial officer Mark Gyetvay said on the sidelines of the Oil and Money conference in London.

Cargoes from the 16.5mn t/yr Yamal LNG export facility were transshipped at Honningsvag in Norway for most of last winter while the NSR was closed. The final Arc7 ice-class vessel to head east on to the NSR in 2018 was the 172,600m³ Rudolf Samoylovich, which left the facility on 18 October.

Novatek considers it strategic to lower shipping costs on both routes, Gyetvay said. The firm had previously said shipping costs for deliveries to Asia through the NSR range from $1.65/mn Btu — if the route is utilised throughout the year — to $2.25/mn Btu, if transit is limited to five months per year.

Novatek's shipping capability has not been hit by US sanctions on four of its vessels, which remain in operation, Gyetvay said.

The company is "considering short-term agreements" for additional capacity, according to Gyetvay. Yamal has been operating above nameplate capacity in recent months, and exports are expected to increase further early next year once the facility's fourth production train comes on stream. This final unit is expected to be completed this year and to start production "some time in the first quarter", Gyetvay said.

Novatek recently took a final investment decision on the 19.8mn t/yr Arctic LNG 2 project, which is expected to cost 30pc less than Yamal. The company has built on its Yamal experience and redesigned its units so they are about 75pc smaller than the Yamal units, with each placed on a single barge, minimising their footprint, Gyetvay said.

Novatek also operates the 660,000 t/yr Vysotsk facility in the Baltic Sea, which offers small-scale reloads and truck-loading services.