Page 104 - RusRPTFeb22

● Novatek
Novatek announced two new contracts for Arctic LNG-2. Novatek announced two new contracts with Chinese buyers for 1.6mtpa from the Arctic LNG-2 project yesterday, including 0.6mtpa for 11 years to ENN LNG and 1mtpa for 15 years to Zhejiang Energy Gas Group. Pricing details were not announced, although Kommersant speculates that they are likely oil-linked. First gas in 2024, but most of Novatek’s share now sold. Kommersant sums up the various contracts that Novatek has signed for its share of the project’s eventual output, which include a June 2021 deal for 0.5mtpa with Glencore, a 3mtpa deal with China’s Shenergy Group, a 1mtpa deal with Spain’s Repsol, and a memorandum of understanding with trader Vitol. The total volumes from Arctic LNG-2 should be 19.8mtpa of which 60% or over 11mtpa should come to main shareholder Novatek. Train-1 of Arctic LNG-2 should be launched in late 2023, Train-2 in late 2024, and Train-3 two years later in 2026.
Novatek reported that its LNG plant, the JV with Gazprombank, Cryogas-Vysotsk, has signed an agreement with Fortum on the supply of the electricity from green energy. In such a way the company plans to reduce the Scope 2 carbon footprint of the plant.
Novatek's press centre reported at the start of February that the company had successfully completed the first of three stages to get international certification for long-term CO2 underground storage sites on the Yamal and Gydan peninsulas, and that site feasibility certificates had been issued for the further study of the sites and subsequent certification stages. The certificates issued confirm that the geological formations within the Ob (Yamal) and Tadebiyakhinsky (Gydan) licence areas have a calculated potential to store at least 600mnt of CO2. These storage facilities will be used when manufacturing low-carbon products (more than 2mnt/a of ammonia and 19mnt/a of LNG) at the Obsky Gas Chemical Complex and Yamal LNG, which is going to use сarbon capture and storage (CCS) technologies, VTB Capital (VTBC) said in a note. Novatek might capture up to 4mnt/a of carbon dioxide as a by-product of ammonia (assuming 2mnt/a of ammonia capacity), according to VTBC. “The news is positive for company in the long term and is in line with Novatek's plans to decarbonise. We highlight that Novatek is taking practical steps in hydrogen and ammonia production by implementing the Obsky Gas Chemical Complex project. This supports the company's commitment to the development of ESG initiatives, which is likely to be welcomed by investors, in our view. The project might cost some $4bn for the entire plant,” VTBC said.
● Other
Transneft published its 2021 operating results on Friday, 14 January, reporting that total crude transported was up 1.2% y/y to 449.7mnt. Deliveries to Russian refineries were up 6% y/y to 247.9mnt, while exports
104 RUSSIA Country Report February 2022 www.intellinews.com