Russian Novatek and Total to sign Arctic LNG 2 deal

Russian independent LNG exporter Novatek is expected to sign a deal with Total on the proposed 19.8mn t/yr Arctic LNG 2 export project this week, a Russian government official said.

The firms are expected to meet at the at the Saint Petersburg international economic forum, the official said. The firms were not able to confirm.

Novatek has been looking for investors for the project but only secured an initial agreement with China's CNPC by the end of last year. Novatek has since agreed an LNG partnership deal with state-owned Saudi Aramco, including investment in the Yamal-Nenets region — the location of Arctic LNG 2 — although no specific project was named.

Total is considering making a direct investment in the project. Its investment decision was — to some extent — contingent on bringing down production costs. Novatek claimed to have achieved this with its proprietary two-stage liquefaction technology — dubbed "Arctic Cascade".

Novatek is expecting to take a final investment decision (FID) on Arctic LNG 2 later in the year or early in 2019.

There has been a lull in firms taking FID in the last couple of years but US LNG exporter Cheniere today committed to commissioning the third train at its Corpus Christi facility.