Russia's Novatek sees enough gas for third big LNG plant

Russia's top private gas producer Novatek expects newly acquired licenses will give it enough resources for a third liquefied natural gas (LNG) plant in its super-cooled gas cluster, CEO Leonid Mikhelson said.

Novatek already has a Yamal LNG plant running at annual capacity of 16.5 million tonnes of super-cooled gas. It plans to start another project, Arctic LNG 2, in 2023.

Arctic LNG 2, with planned annual capacity of 20 million tonnes of LNG, is located on the Gydan peninsula across the straight from the LNG plant on the Yamal peninsula.

Novatek is looking to build more LNG facilities in the area as it aims to produce as much LNG as Qatar.

Mikhelson, who is also a major Novatek shareholder, told reporters in Tokyo that in two years' time, the three gas production licenses Novatek has on the Gydan peninsula would "give the necessary resource base for another LNG project of the size of Arctic LNG 2." He did not give a timeframe for the project.

Separately, Novatek said it has signed an agreement with Japan's Mitsui O.S.K. Lines and JBIC to implement projects to build marine LNG transhipment complexes in the Kamchatka and Murmansk regions of Russia.

"The... transhipment complexes will help to optimise logistics and maximize the efficiency of LNG deliveries from Yamal and Gydan to LNG key markets of the Asia-Pacific region," Mikhelson said in a statement.

Yamal LNG capacity is expected to reach around 19 million tonnes a year after a fourth production line at the plant is launched by the end of this year. Novatek also operates a small-scale LNG plant with an annual capacity of under 1 million tonnes, which it plans to expand.

(Reporting by Jessica Jaganathan and Yuka Obayashi in Tokyo; Additional reporting by Vladimir Soldatkin in Moscow; Writing by Katya Golubkova; Editing by Susan Fenton)

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