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Novatek reports further delays at Yamal LNG train
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RUSSIA’S Novatek has warned of further delays at the fourth train of its Yamal LNG plant, with its launch now expected in the third quarter.
The train, which will produce up to 0.9mn tonnes per year of LNG, had been projected to start up by the end of last year, complementing the output of Novatek’s three existing 5.5mn tpy trains on the Yamal Peninsula. However, Novatek CEO Leonid Mikhelson told report- ers last month that its start-up had been pushed back to the second quarter. He did not disclose reasons for the delay, but Russia’s Kommer- sant newspaper cited sources as saying that the facility’s pipeline system had been designed incorrectly.
Despite its small size, the train nevertheless plays a key role in Novatek’s growth strategy, as it will showcase the company’s proprietary Arctic Cascade technology for the first time. In contrast, the other Yamal LNG trains and the upcoming 19.8mn tpy Arctic LNG-2 project rely on foreign technology.
Novatek wants to see Arctic Cascade used at all its future LNG projects beyond Arctic LNG-2. Doing so will help shield the company’s opera- tions if the US imposes sanctions targeting LNG. After the fourth Yamal LNG train, the technol- ogy will next be deployed at the 5mn tpy Obskiy LNG project, which Novatek aims to take a final investment decision (FID) on this year.
In an earnings call on February 20, Novatek CFO Mark Gyetvay reported that the train was currently 73% complete, versus 61% at the end of September.
“When designing liquefaction trains using a modified version of our Arctic Cascade
liquefaction technology for Obskiy LNG, we decided to improve and enhance the technical solutions on Train 4,” he said. “We will complete the construction and begin commissioning of Train 4 in the 3Q 2020.”
He added that the timing of the fourth train’s launch would have no bearing on Obskiy LNG’s implementation.
Novatek serves as Yamal LNG’s operator with a 50.1% share, while France’s Total has a 20% stake and China’s CNPC and Silk Road Fund have 20% and 9.9% positions respectively. It has said before it does not anticipate needing any partners at Obskiy LNG, while at Arctic LNG-2, expected to start up in 2023, it is joined by Total, China’s CNPC and CNOOC Ltd, and Japan’s Mitsui and JOGMEC.
Gyetvay also commented on progress at Arc- nevertheless
tic LNG-2, noting that 14% of the project’s total $21.3bn capex had already been spent.
“Currently, we are constructing well pads, road infrastructure, water and energy infra- structure, as well as the contractors’ camp,” he said. “Three drilling rigs are on site and started production drilling. We will mobilise another drilling rig and commence drilling shortly.”
The Utrenneye marine terminal that will han- dle LNG shipments from the plant has secured the main government permits, he said. Con- struction and dredging work is underway.
Arctic LNG-2 will consist of three gravi- ty-based structures (GBSs) positioned on the seabed and containing storage tanks. The pour- ing of concrete into the first GBS has begun and work will soon start on the second, according to Gyetvay.™
plays a key role in Novatek’s growth strategy.
Despite its small size, the train
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w w w. N E W S B A S E . c o m Week 08 28•February•2020