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Japanese firms buy 10% stake in Arctic LNG 2
JAPAN
RUSSIAN natural gas developer Novatek has agreed to sell a 10% stake in its Arctic LNG 2 project to a consortium of Japanese rms.
State-owned Japan Oil, Gas and Metals National Corp. (JOGMEC) and Mitsui & Co will buy the stake through their Dutch-based joint venture Japan Arctic LNG, in which JOGMEC owns 75% and Mitsui holds 25%. Total invest- ment in Arctic LNG 2 is projected at $21-23bn.
Following the deal, Novatek will own 60% of the project, with France’s Total, state-run China National Oil and Gas Exploration and Devel- opment Co. (CNODC) and CNOOC Ltd each holding 10%.
Russia’s President Vladimir Putin told report- ers on June 29 that Japanese investments in the project would reach almost $3bn. e Japanese government, meanwhile, has called the project a centerpiece of the East Asian country’s economic co-operation with Russia. Arctic LNG 2, which will be Novatek’s third LNG project, is antici- pated to start up by around 2022-2023 and will have a capacity of 19.8mn tonnes per year (tpy).
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 carefully considered the sanctions-related risks.
Novatek, which intends to reach a nal invest- ment 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. It 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 rst 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.”
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.™
Samsung wins Vietnamese regas work
VIETNAM
SAMSUNG C&T has won work on Vietnam’s i Vai LNG terminal. e South Korean com- pany signed the deal on June 24. It has teamed up with a local company, Petrovietnam Techni- cal Services, for the work, which was awarded by Petrovietnam Gas (PV Gas).
is will be the rst LNG terminal to be constructed in Vietnam. Construction should take 40 months. Work will begin at the end of June and should be completed by October 2022, Samsung C&T said. e Vietnamese company said it would be ready for commer- cial operations ahead of a domestic shortfall, which was expected to emerge towards the end of 2023. e total value of the work is $179.5mn, while Samsung C&T said its share was 61%, or $109.5mn.
e Petrovietnam unit said it would have capacity of 1mn tonnes per year (tpy) and would play a key role in supplying gas to con- sumers in the region, particularly the Nhon Trach 3 and 4 plants. It will have a 180,000 cubic metre storage tank and jetty.
PV Gas signed a framework agreement in January to supply LNG to the Nhon Trach plants, with Petrovietnam Power (PV Power). e two plants require investment of $1.45bn
and will produce 750-800MW each. This statement raised the prospect of expanding the i Vai terminal to 3mn tpy by 2025. e January plan, on the supply of LNG to Nhon Trach, was approved on June 21 by PV Gas.
e country produced 9.6bn cubic metres (cm) of gas in 2018, down from its peak of 10.3bn cm in 2015. All its gas production is consumed locally and the power sector is of particular interest. Oil production is also declining.
e government-backed companies have projected Vietnam will be short 2bn cm per year of gas by 2024, absent LNG imports. is shortage would increase to 7bn cm in 2030 and 9bn cm by 2035.
PV Gas signed a memorandum of under- standing (MoU) on the Son My terminal with the Alaska LNG backers in 2017, during a visit by US President Donald Trump. Given the Alaskan project looks unlikely to go ahead – partly as a result of the US-China trade war – the import terminal appeared less attractive.
Samsung C&T noted this was part of its continuing LNG work in Southeast Asia, which also included work in Singapore and Malaysia.™
Week 27 09 •July•2019 w w w . N E W S B A S E . c o m P5