Novatek to build $996.99m LNG terminal in Kamchatka, Russia

Novatek has signed an agreement to construct a marine liquefied natural gas (LNG) transhipment complex in the territory of Kamchatka, Russia, with an investment of around RUR70bn ($996.99m).

The agreement was signed with the Ministry of the Russian Federation for the Development of the Far East and the Government of the Kamchatka Territory at the Eastern Economic Forum in Vladivostok.

Under the terms of the agreement, the state and the regional governments expressed their support for the implementation of the project.

The construction of the Kamchatka terminal is aimed at increasing the efficiency of LNG deliveries from the Arctic zone to clients in Asia by optimising transport logistics.

Novatek management board chairman Leonid Mikhelson said: “The construction of the Kamchatka transhipment complex will increase the efficiency of LNG deliveries from the Arctic zone by optimising transport logistics.”

“We plan to create a Russian LNG hub for shipments to consumers in the Asia-Pacific region. This investment will contribute to the development of the Northern Sea Route, allowing for the optimal use of the existing Arctic tanker fleet.

“The project will give an additional impetus to the economy of the Far East, create additional jobs and facilitate gasification of Kamchatka by using the boil-off gas from the LNG transhipment complex.”

The Kamchatka transhipment complex is expected to become operational in 2022, according to media sources.

Last month, media sources reported that the company is planning to build a 20 million metric tonnes per annum transhipment terminal in the northern city of Murmansk, citing CEO Leonid Mikhelson.

In a separate development, Novatek signed a memorandum of understanding (MOU) with Japan Oil, Gas and Metals National (JOGMEC) to cooperate on the former’s LNG projects in the Yamal and Gydan peninsulas, including the Arctic LNG 2 project.

Other areas of cooperation include the development of a transport link through the Northern Sea Route for LNG deliveries to the Japanese and Asia-Pacific markets, and exploring LNG marketing opportunities in the Asia-Pacific region.