Total, Novatek and the other project shareholders have approved the final investment decision (FID) for Arctic LNG 2 – a major liquefied natural gas (LNG) development located on the Gydan peninsula, Russia.
The Utrenneye field is the resource base for Arctic LNG 2. The field is located in the Gydan Peninsula in Yamalo-Nenets Autonomous Okrug, approximately 70 kilometres across the Ob Bay from Yamal LNG.
As of 31 December 2018, the Utrenneye field’s 2P reserves under PRMS totalled 1,138 billion cubic metres of natural gas and 57 million tonnes of liquids.
The Arctic LNG 2 project includes the construction of three LNG trains, with a capacity of 6.6 Million tonnes per annum (Mtpa) of LNG each, and at least 1.6 Mtpa of stable gas condensate. The total LNG capacity of the three trains will be 19.8 Mtpa. The project is forecast to export its first LNG cargo by 2023, with the second and third train slated to start up by 2024 and 2026.
Capital expenditures to launch the project at full capacity is estimated at US$21.3 billion equivalent. In 2018, Novatek completed the front-end engineering design and started site preparation, construction of early phase power supply facilities, production wells drilling, and construction of the quayside.
The three trains at Arctic LNG 2 are to be constructed on concrete gravity-based structure (GBS) platforms. A consortium of TechnipFMC, Saipem and NIPIGAS (Russia) has secured the engineering, procurement and construction contract of the LNG plant, with the design and construction of the GBS to be built by the Russian company SAREN, a joint venture of RHI Russia and Saipem.
By early September 2019, more than 90 per cent of long-lead items (including cryogenic heat exchangers, gas turbines, and the compressors for the liquefaction trains) had been ordered. Drilling of production wells, construction of roads and the field’s production infrastructure have also commenced.
Total has a direct 10 per cent interest in Arctic LNG 2 alongside Novatek (60 per cent), CNOOC (10 per cent), CNPC (10 per cent) and a Mitsui-Jogmec consortium, Japan Arctic LNG (10 per cent).
Total also owns an 11.6 per cent indirect participation in the project through its 19.4 per cent stake in Novatek, thus an aggregated economic interest of 21.6 per cent in the project.