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Novatek, Petronet ink cooperation deal to move LNG from Russia to India

PAO Novatek and Petronet LNG Ltd. have signed a memorandum of understanding on future natural gas cooperation, according to a Sept. 4 news release from the Russian company.

The memorandum, signed during a meeting between Russian President Vladimir Putin and Indian Prime Minister Narendra Modi at the Eastern Economic Forum, aims to deliver liquefied natural gas supplies from Russia to India, with some planned to be used in power generation.

In addition, Petronet will invest in Novatek's future LNG projects. Following the award of an exploration license in the Gydan peninsula, Novatek is targeting a new LNG project similar to the Arctic LNG 2, which will have three trains with a capacity of 6.6 million tons each per year.

The memorandum also targets the joint marketing of LNG as a motor fuel in India, including joint investment in developing filling stations and a fleet of LNG-fueled trucks.

Novatek and PAO Sovcomflot also signed the heads of agreement for the creation of a shipping joint venture company.

In a separate news release, Novatek said the joint venture will focus on managing the construction and operations of Arctic ice-class LNG carriers, which will ensure optimized transportation from Novatek's future LNG projects that include the Arctic LNG 2 project.

Novatek chairman of the management board Leonid Mikhelson also said the LNG transport from the Russian Arctic region through the Northern Sea Route to major global markets will help the implementation of Novatek's Arctic LNG projects. He said transport through the route will help meet Putin's goal to hike annual cargo traffic in the area to 80 million tons in 2024.

The parties will also seek other potential partners.