Russia's Novatek signs gas agreements with Japanese companies

12/16/2016

Tokyo, Japan—Novatek, Russia's second-biggest gas producer, said it had signed agreements with Japan's Mitsui & Co., Mitsubishi Corp. and Marubeni Corp. to cooperate in LNG and other energy sectors.

Japan, lacking fuel resources, is the world's largest importer of the gas, while Russia wants to boost its global LNG market share, which is less than 5% at present.

Novatek's CEO, Leonid Mikhelson, said the agreements focus on potential gas production, gas liquefaction and liquefied natural gas transport. Novatek is interested in LNG trading with the three Japanese trading companies, he said.

Marubeni said in a statement that it would explore opportunities to develop upstream and midstream areas for the Arctic LNG-2 project, which Novatek is newly implementing, while Mitsubishi said the agreement with Novatek implies consideration of alliances in "gas and other areas."

"The Asia-Pacific region will grow by the fastest rates... and the Japanese companies, with which we signed the agreement, are present on this market," Mikhelson said, adding that all three Japanese partners could potentially become Arctic LNG-2 stakeholders.

The Arctic LNG-2 plant would be a follow-up to the $27-B Yamal LNG plant, scheduled to launch production at the end of 2017 with a capacity of 5.5 metric MMtpy, with output rising eventually to 16.5 metric MMtpy.

The Arctic LNG-2 project is due to be commissioned by 2025, also with up to 16.5 metric MMtpy of LNG production.

(Reporting by Katya Golubkova; additional reporting by Aaron Sheldrick; writing by Vladimri Soldatkin; editing by Chris Gallagher/Ruth Pitchford.)