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Russia's Novatek completes sale of 10% stake in Arctic LNG 2 to Total

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Russia's Novatek completes sale of 10% stake in Arctic LNG 2 to Total

Moscow — Russian independent gas producer Novatek said late Wednesday that it has closed a deal to sell a 10% stake in the Arctic LNG 2 project to its long-term strategic partner Total.

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The deal was initially agreed last May, and closed on schedule. Total already holds a 19.4% stake in Novatek, so the French company's overall economic interest in Arctic 2 LNG is now about 21.6%. Novatek has said that it is looking for more partners to join the project, but plans to retain a 60% stake. Saudi Aramco, China's CNPC and Japanese investors have expressed interest in joining the project.

Novatek plans to finalize the shareholder structure before taking a final investment decision in the second half of 2019. Should Novatek decide to reduce its participation below 60%, Total will have the option to increase its direct share in the project by up to 15 percentage points.

The company plans to commission the first train of Arctic LNG 2 in 2023, before reaching full capacity in 2026. Plans include three trains located on the Gydan peninsula, with a design capacity of 19.8 million mt. Feedstock will be provided from the Utrennoye field.

Novatek previously agreed to grant Total the option to acquire a 10% to 15% direct interest in all of its future LNG projects located on the Yamal and Gydan peninsulas.

Total also owns a 20% stake in Novatek's Yamal LNG project, which includes three operational lines, each with a capacity of 5.5 million mt. A fourth train of 1 million mt is due to be launched in late 2019. Other shareholders in the project include CNPC and China's Silk Road Fund.

-- Rosemary Griffin, rosemary.griffin@spglobal.com

-- Edited by Shashwat Pradhan, newsdesk@spglobal.com