Page 12 - FSUOGM Week 11

FSUOGM PROJECTS & COMPANIES FSUOGM
Novatek, Gazprombank, Sinopec apply to set up gas trading JV
RUSSIA
Novatek wants to target gas end-users in key markets.
RUSSIA’S Novatek and Gazprombank and Chi- na’s Sinopec applied to the European Commis- sion to form a joint venture in China, the EU regulator said on March 17.
The planned partnership will be involved in the import and export and the purchase and sale of gas, including both piped gas and LNG in China, the EC said. It will also invest in gas-re- lated projects in the country.
The company will be known as Sinova Nat- ural Gas. Novatek, Gazprombank and Sinopec signed a heads of agreement (HoA) on establish- ing the joint venture in June 2019.
Novatek ships LNG to China from its 17mn tonne per year (tpy) Yamal LNG plant in the Arc- tic, where it is partnered with state-owned China National Petroleum Corp. (CNPC) and Beijing’s Silk Road Fund. Its next major LNG export pro- ject, Arctic LNG-2, is due on stream in 2023 and is also expected to deliver considerable volumes to the Chinese market.
Novatek is looking to strengthen its LNG business by controlling the entire supply chain, right down to sales to end-users in China and other key Asia-Pacific markets. As part of its
strategy, last year it also struck preliminary deals with Indian LNG developers H-Energy and Petronet LNG on the joint marketing of the super-cooled gas in India. It also entered into a HoA deal with Japanese gas supplier Saibu Gas on marketing LNG and developing gas-fired power generation and bunkering operations.
Novatek’s goal is to cut costs and also gain a larger foothold in Asia’s growing gas markets.
China’s largest oil and gas producer, Pet- roChina, predicted in January that the country’s gas demand would expand by 8.6% year on year in 2020 to 330bn cubic metres, after increasing by 9.9% in 2019 to 308 bcm. While this projec- tion was made before the coronavirus (COVID- 19) shut down much of the country’s economic activity, and forced the country’s gas importers to either trigger force majeure clauses in their contracts or defer shipments, China is begin- ning to ramp up its industrial and commercial activity.
While demand may miss PetroChina’s initial projections, the likelihood is that the govern- ment’s efforts to tackle air pollution will still lead to material consumption gains this year. ™
Novatek picks Arctic LNG-2 suppliers
RUSSIA
Germany’s Siemens and two suppliers have been selected.
RUSSIAN gas firm Novatek has selected sup- pliers for one of its new LNG export projects in the Arctic, Kommersant reported on March 16, citing sources.
The Obsky LNG terminal, consisting of three 1.6mn tonne per year (tpy) liquefaction trains, is due to start operations in either late 2022 or early 2023. Novatek has said before that it aims to take a final investment decision (FID) on the venture this year.
According to Kommersant, the company has awarded a joint contract worth €130mn ($145mn) to Germany’s Siemens and local man- ufacturer Kazankompressormash for the supply of key equipment. Siemens will provide seven of its SGT-700 model gas turbines for the plant, while Kazankompressormash, a subsidiary of Russian engineering group HMS, will supply 10 compressor units capable of working in low Arctic temperatures.
Novatek will also pay the pair to service the equipment over a 20-25 year period. In addition, the producer has selected ZiO-Podolsk, a subsid- iary of Russian nuclear firm Rosatom, to manu- facture cryogenic heat exchangers for the project.
As of press time, neither Siemens,
Kazankompressormash nor Novatek had commented on the matter. However, Rosatom confirmed to Kommersant that it had taken part in a competition for the supply of the heat exchangers.
Novatek launched its first LNG export termi- nal Yamal LNG in late 2017, and aims to bring its second on stream, Arctic LNG-2, in 2023. Both projects rely heavily on foreign equipment and technology.
The company had intended to build Obskiy LNG with only minimal foreign assistance, although the award to Siemens suggests this will not be the case. But the terminal will still showcase Novatek’s proprietary liquefaction technology, known as Arctic Cascade. The tech- nology will be used for the first time at a 0.9mn tpy fourth train at Yamal LNG. The terminal had been slated to start operations by the end of last year, but commissioning is running behind schedule, reportedly because of unrelated design errors.
The Arctic Cascade technology will need to be modified for the larger size of Obskiy LNG’s trains, according to Kommersant, requiring Novatek to secure an additional patent. ™
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