Russia’s natural gas producer NOVATEK announced that its wholly-owned subsidiary, NOVATEK Gas & Power Asia signed two Agreements for the long-term supply of LNG from the Arctic LNG 2 project.
The first one with Glencore, one of the world’s largest global diversified natural resource companies. The Agreement established the key commercial terms for the long-term supply in excess of 0.5 million tons of LNG per annum from the Arctic LNG 2 project. The LNG will be delivered to a number of locations in East Asia.
“The market for LNG in the Asia Pacific region has fully recovered from the impact of the coronavirus pandemic and has now resumed a stable growth phase”, noted Leonid Mikhelson, NOVATEK’s Chairman of the Management Board. “This Agreement is consistent with NOVATEK’s commercial strategy to build a sustainable LNG sales portfolio including both end customers and portfolio players in the Asia Pacific market, with LNG delivered all-year-round along the Northern Sea Route”.
“We are pleased to sign this Heads of Agreement with Novatek, one of the leading LNG producers globally,” added Ivan Glasenberg, CEO of Glencore. “Delivering long-term LNG supply into Asia is one example of how we are supporting our customers’ energy transition journey.”
The second Agreement was signed with Zhejiang Energy Gas Group, a subsidiary of the Zhejiang Provincial Energy Group. The Agreement builds on the MOU signed by the parties in October 2019 and establishes the key commercial terms for the annual supply of up to one million tons of LNG from the Arctic LNG 2 project for a term of 15 years. The LNG will be delivered on a DES basis to Zhejiang Energy’s LNG terminals in China, including feedstock for the buyer’s new gas-fired power generation facilities.
“The agreement is consistent with our commercial LNG strategy to diversify our client base and target end consumers in the rapidly developing Asian Pacific market,” explained Mr Mikhelson. “The fast-growing Chinese market is a key region in our LNG marketing strategy and we plan to further increase our supplies of cleaner-burning LNG to assist China in reaching its net-zero targets by 2060.”