Vitol and Repsol sign SPAs for Arctic LNG 2 gas

Thursday, 04 April 2019
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During the 19th International Conference & Exhibition on Liquefied Natural Gas (LNG2019) in Shanghai, Novatek Gas&Power Asia, a trading subsidiary of PAO NOVATEK, Vitol and Repsol signed of Heads of Agreement for the supply of LNG.

These agreements were signed during the 19th International Conference & Exhibition on Liquefied Natural Gas (LNG2019) held in Shanghai.

Under the Vitol agreement, a 15-year contract will be signed to supply 1 mill tonnes of LNG from the Arctic LNG 2 project, as well as other NOVATEK outlets on an annual basis.

The gas will be shipped on an FOB basis to NOVATEK’s transhipment terminals in the Murmansk region and Kamchatka.

“We commenced contracting LNG volumes from our new project Arctic LNG 2,” said NOVATEK’s First Deputy Chairman of the Management Board, Lev Feodosyev. “LNG volumes sold at our transhipment terminals ensures the flexibility of LNG supplies around the world and allows us to create LNG hubs in the Asia/Pacific and Atlantic basins.”

The Repsol agreement also involves a 15-year contract to supply 1 mill tonnes per annum of LNG from Arctic LNG 2 project and other NOVATEK projects.

Ex ship

LNG will be delivered ex-ship primarily to markets on the Iberian Peninsula.

“The agreement for the sale of LNG would allow us to increase our market presence on the Iberian Peninsula where Russian pipeline gas is not supplied,” Feodosyev said. “Expanding our supply geography and diversifying our long-term contract customer base is consistent with the company's strategy to ramp up LNG production in the Russian Arctic.”

Arctic LNG 2 involves the constructing three LNG trains of 6.6 mill tonnes per annum each, using gravity-based structure (GBS) platforms.

The project is based on the hydrocarbon resources of the Utrenneye field. As of 31st December, 2018, the Utrenneye field’s 2P reserves under PRMS totalled 1,138 bill cu m of natural gas and 57 mill tonnes of liquids.

Under the Russian classification, reserves totalled 1,978 bill cu m of natural gas and 105 mill tonnes of liquids. OOO Arctic LNG 2 owns the LNG export license, NOVATEK explained. 

 

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