MOSCOW—Novatek is interested in Saudi Aramco joining the Arctic LNG-2 plant as a partner, the Russian gas producer’s head Leonid Mikhelson said on Feb. 22, highlighting growing ties between Russia and Saudi Arabia.

Both countries have been instrumental in implementing a global pact on cutting oil production by almost 1.8 million barrels per day.

Novatek and its partners started producing LNG at the Yamal LNG project last year. Novatek is headed by Mikhelson, who is ranked as Russia’s wealthiest man according to the Russian edition of Forbes.

It also plans to launch its second LNG project in the nearby Gydan peninsula in 2022-2023.

Novatek, Russia’s largest non-state natural gas producer, and Saudi Aramco signed a memorandum on cooperation last week, without disclosing details

“We are interested in Saudi Aramco to become our partner in Arctic LNG-2 project,” Mikhelson told a conference call with investors.

Russian President Vladimir Putin said at the time of Yamal LNG launch in December, that Russia would like to sell its gas to Saudi Arabia.

More Equity Financing

Mikhelson also said that Novatek plans to finance the new project mostly via its shareholders, with 45% of total financing expected to be via equity and 55% could be raised by external debt.

Investments in the $27 billion Yamal LNG project were put at risk after Novatek came under Western sanctions over Moscow’s role in the Ukraine crisis. But it found other financing sources.

Mikhelson said on Feb. 22 that financing of Arctic LNG-2 would be lower by a third than Yamal LNG.