Novatek boosting LNG-projects
Leonid Mikhelson, the Chairman of board, Novatek, outlined current activities carried out by the two Russian projects for the liquefaction of natural gas in the Extreme North during his meeting with the Prime-Minister Dmitry Medvedev. The company plans to commission the “Yamal LNG” plant at full capacity ahead of schedule. European banks wish to join in funding the project. According to the company’s plans, Kola wharf for one more project Arctic LNG-2” will be built in 2019.
According to Mr. Mikhelson, the implementation of Yamal LNG project is progressing according to the plan. 31k people are at work at the construction site. The pre-commissioning activities of the 1st LNG production train, with the capacity of 5.5m tonnes are afoot. The commissioning is scheduled for the end of this year.
The capacity of Yamal LNG plant is expected to reach 16.5m tonnes in the coming years. Previously, it was planned that the full capacity will be reached by 2019, but Novatek head promised Mr. Medvedev that the second train of Yamal LNG would be put into operation 3 month ahead of schedule, while the third unit could be completed six to nine earlier than planned. Thus, Yamal LNG can be commissioned at full capacity next year.
Despite of the misfiring relationship with foreign partners, new sanctions from the USA, and controversy with European countries erupted after the supply of Siemens equipment to Crimea, Novatek, according to Mr. Mikhelson, did not meet any obstacles in communication with foreign members of Yamal LNG project.
The value of signed contracts, envisaging the delivery of liquefied natural gas (Yamal LNG) has already exceeded 600bn RUB. In the short-term, Novatek head intends to increase this sum. So far, the main potential consumer of LNG is APR countries. As it was previously informed by the CEOs of Russian independent gas company, APR accounts for 86% of all contracts concluded. But now, due to the recent acquisitions (terminals in Poland and majority stake of Baltic terminal in Vysotsk), Novatek explores the European markets.
Mikhelson also noted during the meeting that several European banks will join the financing Yamal LNG in recent years. Previously, the funding was granted by Russian and Chinese banks.
Novatek has completed the draft of the 1st phase of large-scale marine structures “Kola Wharf”. The construction has started in summer this year. Project investments are estimated at 80-90bn RUB. “How does the project change? We built Yamal LNG onshore. But now, we have decided to change the construction: liquefaction trails will now be located on the gravity platforms. These platforms, as well as the liquefaction trials will be manufactured in factories. The 1st phase of Kola wharf is planned for the commissioning in 2019. One more important thing to be mentioned is the establishment of a new engineering centre in NIPIGAZ (one of the best institutes). 51% are foreign engineering partners”, says Mikhelson. Novatek is eager to cooperate with Russian contractors.
Estimates suggest that Kola wharf will employ 8-10k people, and in Russia (suppliers and contractors) even more – 50-60k.
Arctic LNG-2 provides for the assembly of LNG production trials on the concrete gravity based structure in the Murmansk region. Mass production of liquefaction trials is envisaged to significantly reduce the price of arctic LNG. Two dry docks are planned for the construction on Kola Peninsula. By the late 2018, Novatek encompasses the completion of project documentation for Arctic LNG-2 plant. As was informed by the company’s managing board, the project will be implemented in 2022-2023. LNG production volume expected – 16.5 MTPA.
According to Medvedev, Yamal LNG and Arctic LNG-2 are “large-scale backbone infrastructural projects”, aimed at the development of the region, transport and logistics in the Arctic. Among the Novatek plans is the construction of a terminal for LNG transhipment with the capacity of 20m tonnes, to be located on the eastern coast of Kamchatka, enabling the company to reduce expenses due to the transhipment of LNG from ice-class tankers.