Page 11 - AsianOil Week 26

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Mitsui president and CEO Tatsuo Yasunaga downplayed concerns that the project could fall foul of Western sanctions against Russia during an investor call, saying his company had care- fully considered the sanctions-related risks.
Novatek, which intends to reach a final investment decision (FID) on the facility by the end of this year, said participation in the project would provide Mitsui and JOGMEC with a long- term o ake option of about 2 million tpy.
Novatek began delivering LNG to Japan from its Yamal LNG project under a long- term offtake agreement with Total last week. Yamal LNG started up in 2017 and was Novatek’s first LNG project in the Russian Arctic Circle.
Commenting on the start of LNG deliveries, Leonid Mikhelson said: “Japan is an important LNG market and one of the priority destinations in our LNG marketing strategy.”
Image: Total
When Arctic LNG 2 comes online Novatek’s total LNG liquefaction capacity will increase to 37mn tpy, contributing signi cantly towards its 2030 capacity target of 57-58mn tpy.™
Novatek ships first cargo to Japan
PIPELINES & TRANSPORT
NOVATEK has shipped a rst cargo of LNG to Japan, the Russian independent gas company said on June 26. e cargo was delivered under a long-term o ake agreement with Total. It was delivered to the Tobata LNG terminal.
“Commencing LNG shipments to the Japa- nese market represents an important milestone for the company as Japan is an important LNG market and one of the priority destinations in our LNG marketing strategy,” said Novatek’s chairman, Leonid Mikhelson.
Japan has played a critical role in the devel- opment of Russia’s LNG supplies in the Sakhalin region. While Yamal LNG is further away, it is evident that the Asian market is critical, even if deliveries are required to use the Northern Sea Route (NSR), or face a long round trip.
e main emphasis for Novatek and its LNG developments has been China. Chinese com- panies are invested in both Yamal LNG and the proposed Arctic LNG 2 plan, which should reach nal investment decision (FID) this year.
Japan, though, is the largest LNG importer in the world, taking around 83 million tonnes in 2018, while China’s imports hit 53.7 million tonnes. While Japan’s demand is on the way
down, Chinese consumption is increasing. Novatek’s Asian expansion would benefit from its plans for transhipment terminal, in Kamchatka. is would allow the company to use its ice-breaking LNG carriers (LNGCs) in the sea areas where such equipment is neces- sary and o oad cargoes to be carried onward by
cheaper LNGCs.
Commenting last week, Mikhelson highlighted
the importance of the NSR and the Kamchatka terminal, which would “expand LNG supplies to Japan as well as strengthen trade and economic links between our respective countries”.
In addition to this transhipment terminal plan, though, Novatek has also signed a deal with Japan’s Saibu Gas on using the Hibiki LNG terminal. e company said this would allow it to “diversify our customer base and increase the exibility of deliveries to the pre- mium LNG markets”.
e Yamal LNG plant reached full capacity at its three trains in December 2018, with a smaller fourth train due to start up at the end of this year. During 2018, the plant sent its rst cargo to Brazil in September, to China in July, to Spain in June and to India in March.™
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