Russian energy giant Novatek sells 10% stake in Arctic LNG 2 to Japanese firms

Japanese consortium Mitsui & Co (Mitsui) and Japan Oil, Gas and Metals National Corporation (JOGMEC) have signed a deal with one of Russia’s largest natural gas producers to take a 10-percent stake in the Arctic LNG 2 project.

The sales and purchase agreement was signed on Saturday in the presence of Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe, Novatek said in a statement.

The deal also stipulates that Novatek will sell around two million tons of LNG annually to the Japanese partners. The agreement is set to be finalized in the near future pending regulatory approvals, according to the Russian energy firm.

“We welcome the consortium of Mitsui and JOGMEC as partners in our Arctic LNG 2 project,” said Novatek’s chairman of the management board, Leonid Mikhelson. He added that the participation of the Japanese firms in the project will “contribute to its successful implementation.”

Novatek, Russia’s largest independent natural gas producer, has already shipped LNG to the Asian partners. The first LNG cargo to Japan was delivered earlier this week from the Yamal LNG plant.

Novatek’s second plant for liquefying gas in the Arctic region has drawn the interest of several foreign investors, including China, France, and Saudi Arabia. The plant is expected to be launched in 2022-2023, producing 19.8 million tons of LNG per year.

China National Offshore Oil Corporation (CNOOC) and China National Oil and Gas Exploration and Development Company (CNODC) secured a 10-percent stake in the Artic project in April. The agreement came shortly after France’s Total signed a similar deal to buy a direct 10-percent interest in Arctic LNG 2. Meanwhile, Riyadh is also eyeing investment in Arctic LNG 2, among other Russian energy projects, and may purchase a stake of up to 30-percent.

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