China National Offshore Oil Corporation (CNOOC) has agreed to acquire a 10% stake in Arctic LNG 2, the holding company of the $25.5bn (£20.09bn) Arctic LNG 2 project in Russia, from Novatek for an undisclosed price.

In this connection, CNOOC and its subsidiary CEPR signed a share purchase agreement with Novatek and its subsidiary Ekropromstroy.

Arctic LNG 2 project details

The Arctic LNG 2 project, which will be built in the Gydan Peninsula in northern Siberia, will have a production capacity of 19.8 million tons per year (Mt/y). The LNG project, which is scheduled to be commissioned in 2023, will feature three liquefaction trains that will each have a capacity of 6.6 Mt/y.

CNOOC, in a statement, said: “Pursuant to the Share Purchase Agreement, completion of the acquisition is conditional upon the approval of relevant government authorities of China and Russia and satisfaction of certain other conditions. The acquisition is expected to complete in the near future.”

The feedstock for the Arctic LNG 2 project will come from more than seven billion boe of resources estimated to be contained in the Utrenneye onshore gas and condensate field. Arctic LNG 2 holds the liquefied natural gas licence that gives it an exclusive right to export liquefied natural gas produced from gas drawn from the Utrenneye field.

Arctic LNG 2 project contract and stakeholders

Last month, TechnipFMC bagged the engineering, procurement and construction (EPC) contract for the LNG project from Novatek. Under its contract, TechnipFMC will undertake the engineering, procurement, supply, construction, and commissioning of the integrated liquefied natural gas facility.

Novatek is the operator of the Arctic LNG 2 project with a stake of 70%, having agreed to offload stakes of 10% each to Total, China National Oil and Gas Exploration and Development Corporation (CNODC) – a subsidiary of China National Petroleum Corporation (CNPC), and CNOOC.

Total, which already owns 19.4% stake in Novatek, will have an overall economic interest of around 21.6% in the Arctic LNG 2 project.

A final investment decision (FID) on the Russian LNG project is expected to be taken in the second half of 2019.