Total Buys 10 Percent Stake in Arctic LNG 2
Total has signed definitive agreements with Novatek for the acquisition of a direct 10 percent interest in Arctic LNG 2.
With Total’s 19.4 percent stake in Novatek, and Novatek’s intention to retain 60 percent of the project, Total’s overall economic interest in Arctic LNG 2 will be approximately 21.6 percent. Should Novatek decide to reduce its participation below 60 percent, Total will have the possibility to increase its direct share up to 15 percent.
Total and Novatek have also agreed that Total will have the opportunity to acquire a 10 to 15 percent direct interest in all of Novatek's future LNG projects located on the Yamal and Gydan peninsulas.
Arctic LNG 2 has a production capacity of 19.8 million tons per year, or 535,000 barrels of oil equivalent (boe) per day. The project will develop over seven billion boe of resources in the Utrenneye onshore gas and condensate field.
The project’s final investment decision is expected to be taken in the second half of 2019, with plans to start up the first liquefaction train in 2023.
“We are delighted to have concluded the definitive agreements for our entry into this new world class LNG project based on the vast Russian gas resources alongside our partner Novatek,” Patrick Pouyanne, chairman and CEO of Total, said in a company statement.
“Arctic LNG 2 builds on the success of Yamal LNG and will introduce several innovative solutions to further increase competitiveness," he added.
Pouyanne continued by saying, “Arctic LNG 2 fits into our strategy of growing our LNG portfolio through competitive developments based on giant low cost resources primarily destined for the fast growing Asian markets”.
Leonid Mikhelson, Novatek’s chairman of the management board, stated, “we have worked closely with Total for many years and have built a good working relationship based on mutual trust and respect”.
“We are pleased to further develop our successful cooperation with them on our new Arctic LNG 2 project,” he added.
“The project’s vast conventional reserve base, advanced engineering and design work, and innovative LNG design combined with our experience in implementing large-scale LNG projects in the Arctic region is part of our strategy for creating sustainable shareholders value,” Mikhelson continued.
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