Novatek has awarded Siemens a contract to deliver compressor equipment for three liquefaction trains of the $25.5bn Arctic LNG 2 Project in Russia.


Image: Siemens wins contract for Novatek’s Arctic LNG 2 Project. Photo: courtesy of Rufus46/

Under the contract, Siemens will supply three feed gas compressors and six boil-off gas compressors for the Arctic LNG 2 Project, which is planned to come up in the Gydan Peninsula in the north of Siberia.

As per the contract terms, there is a provision for localizing the equipment fabrication for the third train of the project in Russia. Financial terms of the contract were not disclosed.

Novatek management board first deputy chairman Alexander Fridman said: “Siemens and NOVATEK have a successful working relationship as they supplied gas turbine generators and boil-off gas compressors for our Yamal LNG plant.

“Our next project, Arctic LNG 2, will utilize new technological solutions and employ domestic manufacturers. The supply contract envisages new prospects for localizing the compressor equipment fabrication for the LNG industry, which is consistent with our strategic aim of creating and developing an LNG Center of Excellence in Russia.”

The Arctic LNG 2 project will feature three LNG trains with each of them having a capacity of 6.6 million tons per annum each. The three trains will use gravity-based structure (GBS) platforms.

Overall, the proposed LNG project will have a production capacity of nearly 19.8 million tons per year (Mt/year), or 535,000 barrels of oil equivalent per day (boe/d).

The project aims to unlock more than seven billion boe of hydrocarbons’ resources estimated to be contained in the onshore Utrenneye gas and condensate field.

As of 31 December 2018, the reserves of the Utrenneye field, under the Russian reserves classification, have been estimated at 1,978 billion cubic meters of natural gas and 105 million tons of liquids.

Novatek is expected to make an investment decision on the Arctic LNG 2 project this year with production from the first train targeted for the end of 2023.

In December 2018, Saipem, in consortium with Turkish oil and gas services company Renaissance, bagged an onshore engineering and construction contract worth €2.2bn for the Arctic LNG 2 project.

In May 2018, Total signed a deal to acquire a 10% stake in the project from Novatek for an undisclosed price. Additionally, the French oil and gas company will have the opportunity to increase the stake by up to 5% if the Russian natural gas producer decides to cut down its stake to 60%.