Novatek Says Arctic LNG 2 Venture Concluded 20-Year Sales Deals for Entire LNG Output

MOSCOW (Sputnik) - Russian gas company Novatek announced on Wednesday that its joint venture Arctic LNG 2 contracted the entire liquefied natural gas output under 20-year deals with stakeholders.

"NOVATEK announced today that its joint venture Arctic LNG 2 concluded 20-year LNG Sales and Purchase Agreements for the total LNG production volumes with all the Project's participants. The LNG sales from Arctic LNG 2’s first liquefaction train are planned to commence in 2023," the company said in a statement.

The inked agreements provide for LNA offtake on the free-on-board basis at the Murmansk and Kamchatka transshipment terminals, both of which are currently being developed, with pricing formulas tied to the international oil and has indices. The supply volume is determined by the stake in the project.

"The long-term offtake agreements between Arctic LNG 2 and its participants ensure the future revenue stream from LNG sales and de-risks the Project," Leonid Mikhelson, the chairman of Novatek's management board, said.

Novatek is the largest independent natural gas producer in Russia. It entered the LNG business in 2017 with the large-scale Yamal project, followed by the Arctic LNG 2 project. The latter is expected to be launched in 2023.