Novatek Sell 20% Stake in Arctic LNG 2 to China

Russian gas producer Novatek said on  that it had signed agreements with two Chinese companies to sell a combined 20 percent stake in its new liquefied natural gas project, Arctic LNG 2.

Under the agreement, the Chinese firms -CNOOC and CNODC - will become shareholders in the Arctic LNG project with 10 percent each. Novatek gave no financial details in a statement announcing the agreements.

According to a press release, Novatek  has signed a binding agreement to enter the Arctic LNG 2 project with China National Oil and Gas Exploration and Development Company Ltd (CNODC), a wholly owned subsidiary of China National Petroleum Corporation (CNPC).

The binding agreement, signed in the presence of Leonid Mikhelson, Chairman of the Management Board of Novatek, and Wang Yilin, Chairman of CNPC, provides for the acquisition by CNODC of a 10% participation interest in Arctic LNG 2.

“The agreement is an important milestone in our Arctic LNG 2 project implementation as well as a continuation of our successful cooperation with CNPC,” noted Leonid Mikhelson, Novatek’s Chairman of the Management Board.

Leonid added: “We successfully launched the Yamal LNG project on budget and ahead of initial schedule as partners, which is a unique achievement in the global gas industry. The accumulated experience of working together is a solid basis for the successful implementation of our new LNG project”.

In a separate announcement, Novatek said that it has signed a binding agreement with CNOOC Ltd on the acquisition a 10% participation interest in the Arctic LNG 2 project.  

“We are very glad that CNOOC has joined our Arctic LNG 2 project as our new partner, since China represents one of the key consuming markets for our LNG sales,” noted Leonid.

“Arctic LNG 2 will be a game-changer in the global gas market, and our proven track record to successfully build an LNG facility in the Arctic zone, combined with a proven logistical model with access to prospective markets and large hydrocarbon resource base will ensure the successful implementation of this world class project,” he added.