Mitsui, JOGMEC join Arctic LNG-2

Japanese trading house Mitsui & Co and state-owned Japan Oil, Gas and Metals National Corporation (JOGMEC) have signed a sales and purchase agreement with Russia’s Novatek (NVTK.ME) for a 10% participation interest in the Arctic LNG 2 project.

The share will be acquired through the Dutch Company, Japan Arctic LNG B.V., in which Mitsui has invested jointly with JOGMEC. The equity ratio of JOGMEC and Mitsui will be set at 75 percent and 25 percent respectively.

The project will develop natural gas and liquefaction facilities with a production capacity of 19.8 million tonnes per year from the conventional onshore gas field located on the Gydan Peninsula within the Arctic Circle, north of the Russian Federation.

Novatek commenced production at the nearby Yamal LNG project in 2017, and this Project will be the company’s second LNG project in the Arctic Circle in Russia. Novatek’s estimate of the total development cost is currently around $ 21-23 billion.

"After participation and following a final investment decision with our partners, the project plans to commence production of LNG from around 2023. LNG from the Project will be delivered mainly to Asia and Europe via the Northern Sea Route," said Mitsui & Co.

Other partners of the Project are a subsidiary of the French company Total S.A, a subsidiary of China National Petroleum Corporation (CNPC), and a subsidiary of China National Offshore Oil Corporation Limited (CNOOC) with a 10% stake each.

Mitsui's business activities in the LNG industry began with participation in a LNG project in Abu Dhabi in the 1970s.

" Since then we have participated in LNG projects in various parts of the world, including Australia, Qatar, Oman, Russia, Indonesia, Equatorial Guinea, the United States and Mozambique. Our involvement in these projects has spanned entire value chains, from LNG production and transportation to marketing, " said a press release from trading company.

"By using our accumulated knowledge of the LNG business and based on our relationships with gas-producing countries and business partners, we will continue contributing to the provision of resources to ensure stable supplies of energy to Japan and other countries through further expansion of the LNG business," it said.