Russia’s Novatek sells a 20 percent stake in LNG to China

Russian gas producer Novatek has signed agreements with two Chinese companies to sell a combined 20 percent stake in its new liquefied natural gas project called Arctic LNG 2. The two Chinese firms, China National Petroleum Corporation (CNPC) and its wholly owned subsidiary China National Oil and Gas Exploration and Development Company Ltd (CNODC), will become shareholders in the Arctic LNG project with 10 percent each.

The binding agreement, signed in the presence of Leonid Mikhelson, Chairman of the Management Board of Novatek, and Wang Yilin, Chairman of CNPC, provides for the acquisition by CNODC of a 10 percent participation interest in Arctic LNG 2.

In a press release, Novatek’s Chairman of the Management Board Leonid Mikhelson said, “The agreement is an important milestone in our Arctic LNG 2 project implementation as well as a continuation of our successful cooperation with CNPC,” and “We successfully launched the Yamal LNG project on budget and ahead of initial schedule as partners, which is a unique achievement in the global gas industry. The accumulated experience of working together is a solid basis for the successful implementation of our new LNG project”.

In a separate announcement, Novatek said that it has signed a binding agreement with CNOOC Ltd on the acquisition a 10 percent participation interest in the Arctic LNG 2 project, “We are very glad that CNOOC has joined our Arctic LNG 2 project as our new partner, since China represents one of the key consuming markets for our LNG sales,” adding, “Arctic LNG 2 will be a game-changer in the global gas market, and our proven track record to successfully build an LNG facility in the Arctic zone, combined with a proven logistical model with access to prospective markets and large hydrocarbon resource base will ensure the successful implementation of this world class project.