Italy’s Saipem is likely to get a subcontractor role in a new project to produce LNG in the Arctic by Russia’s Novatek, one of Novatek’s partners said.
Novatek, Russia’s largest non-state LNG producer, is aiming to produce as much LNG as the world’s biggest exporter Qatar and is drawing up plans to build a second plant, known as Arctic LNG 2, on the Gydan Peninsula that juts into the Kara Sea. Production is due to start in 2022-2023.
Four sources told Reuters earlier this month that Saipem was expected to be chosen to build offshore platforms for the facility.
“It is planned that Saipem will take part as a subcontractor to design the gravity-based units. That’s where they have expertise and experience,” said Boris Lim, head of NIPIGAZ, an engineering firm on the project and a Novatek partner.
The gravity-based units will sit on the seabed some 40 km (24.85 miles) from the onshore gas deposit and will produce and ship LNG, Novatek CEO Leonid Mikhelson said.
Mikhelson said Novatek was also in talks with Saipem to possibly give the Italian firm a partner role in managing the company that will oversee the shipyard which is to be built on the Kola Peninsula in north-west Russia. He said more foreign firms might also participate.
Novatek started building the wharf—expected to cost between $1.3 billion and $1.5 billion—in June. The first dock is expected to be ready in 2019.
Mikhelson, Russia’s richest businessman according to Forbes magazine, said Arctic LNG 2 would have three lines with a capacity of around 6 million tonnes per year each.
The Utrenneye gas field will be the resource base for Arctic LNG 2. “We have defined production capacity at just over 30 billion cubic meters [1 Tcf] per year... which is enough to compensate for the project’s costs,” Mikhelson said of the gas field.
For now, Russia has just one operational LNG facility, run by Gazprom on the Pacific island of Sakhalin.
Novatek is due to start producing LNG at its Yamal LNG project in the fourth quarter. That project will eventually produce around 16.5 million tonnes of LNG per year.
Mikhelson said Novatek was in talks with a number of companies to join Arctic LNG 2, including his current partners in Yamal LNG which is co-owned by France’s Total, and China’s CNPC and the Silk Road Fund.
Novatek is under U.S. sanctions over Moscow’s role in the Ukraine crisis, which limits the company’s ability to deal with U.S. financial entities. Novatek raised financing for Yamal from China, Russia and some European lenders.
—Reuters
Recommended Reading
Tech Trends: QYSEA’s Artificially Intelligent Underwater Additions
2024-02-13 - Using their AI underwater image filtering algorithm, the QYSEA AI Diver Tracking allows the FIFISH ROV to identify a diver's movements and conducts real-time automatic analysis.
Subsea Tieback Round-Up, 2026 and Beyond
2024-02-13 - The second in a two-part series, this report on subsea tiebacks looks at some of the projects around the world scheduled to come online in 2026 or later.
Exclusive: Silixa’s Distributed Fiber Optics Solutions for E&Ps
2024-03-19 - Todd Chuckry, business development manager for Silixa, highlights the company's DScover and Carina platforms to help oil and gas operators fully understand their fiber optics treatments from start to finish in this Hart Energy Exclusive.
CERAWeek: AI, Energy Industry Meet at Scary but Exciting Crossroads
2024-03-19 - From optimizing assets to enabling interoperability, digital technology works best through collaboration.
Cyber-informed Engineering Can Fortify OT Security
2024-03-12 - Ransomware is still a top threat in cybersecurity even as hacktivist attacks trend up, and the oil and gas sector must address both to maintain operational security.