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23 Oct, 2018 14:56

Saudi Arabia to invest $5bn in Russia’s future LNG project in Arctic

Saudi Arabia to invest $5bn in Russia’s future LNG project in Arctic

Riyadh is ready to invest $5 billion in the LNG 2 (liquefied natural gas) project in the Russian Arctic, the head of Russian Direct Investment Fund (RDIF), Kirill Dmitriev, said at the Saudi Arabian investment forum on Tuesday.

Earlier, Saudi Minister of Energy Khalid al-Falih said the kingdom was considering the possibility of becoming the second biggest investor in the project led by Novatek, Russia’s biggest independent gas producer. The minister didn’t provide details on Saudi Arabia’s potential share in the project.

In May, French energy giant Total, which holds a 19-percent stake in Novatek and participates in developing the company’s first LNG project in Yamal, announced plans to buy a 10-percent stake in Arctic LNG 2 enterprise, which could reportedly be worth around $25.5 billion. The reported volume of investments by the French company amounts to $2.55 billion.

The project also attracted a lot of interest from international partners, including Chinese national oil and gas major CNPC, energy giant Saudi Aramco, South Korean public natural gas company KOGAS, as well as from Japanese investors, according to Novatek’s CEO, Leonid Mikhelson.

The company is planning to sell up to 40 percent of the Arctic LNG 2 project to the foreign partners. The final investment decision may reportedly be made in the second half of next year with the first train expected to start up by the end 2023.

Arctic LNG 2 is a giant liquefied natural gas project on the Gydan Peninsula in Northern Siberia. With a production capacity of approximately 19.8 million tons per year, the project is set to unlock over seven billion barrels of oil equivalent of hydrocarbon resources in Russia’s onshore Utrenneye gas and condensate field.

Arctic LNG 2 production will be delivered to international markets in the same way as the Yamal LNG project. A fleet of ice-class LNG carriers, which will be able to use Russia’s Northern Sea Route, will deliver LNG cargoes destined for Asia.

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