French oil and gas major Total SA will acquire a 10% direct working interest in Arctic LNG 2, an LNG project led by Russian natural gas producer PAO NOVATEK.
The deal will bring Total's overall economic interest in the LNG project on the Gydan Peninsula in the north of Siberia to approximately 21.5%, the company said in a May 24 press release.
Total holds a 19% stake in Novatek, which intends to retain 60% interest in the LNG project. Should Novatek decide to reduce its participation below 60%, Total could increase its direct share to 15%.
Arctic LNG 2 will have a production capacity of approximately 19.8 million tons per year, or 535,000 barrels of oil equivalent per day.
The final investment decision is expected in 2019, with plans to start up the first train by the end of 2023.
Total will also have the opportunity to acquire a 10% to 15% direct interest in Novatek's future LNG projects in Yamal and Gydan, according to the release.
As part of its push into the natural gas and electricity space, Total announced in November 2017 that it would acquire ENGIE SA's upstream LNG business for almost $1.5 billion, paving the way for Total to manage an overall volume of about 40 million tonnes per year by 2020. The acquisition positions Total as the second-largest global LNG player among the majors, with a worldwide market share of 10%.
