Novatek pens LNG supply deal with China's Zhejiang Energy
Russian LNG exporter Novatek announced on June 2 it had signed a heads of agreement (HoA) with China's Zhejiang Energy to deliver up to 1mn metric tons/year of LNG from its Arctic LNG-2 project.
The proposed contract has a 15-year term and covers supplies on a delivered ex-ship basis to Zhejiang's LNG terminals in China, providing feedstock for the company's new gas-fired power plants. The HoA builds on a memorandum of understanding signed by Novatek and Zhejiang in October 2019.
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"The agreement is consistent with our commercial LNG strategy to diversify our client base and target end consumers in the rapidly developing Asian Pacific market," Novatek CEO Leonid Mikhelson commented. "The fast-growing Chinese market is a key region in our LNG marketing strategy, and we plan to further increase our supplies of cleaner-burning LNG to assist China in reaching its net zero targets by 2060."
Novatek's Arctic LNG-2 project on Russia's northern Gydan Peninsula is due online in 2023 and will produce 19.8mn mt/yr of LNG at full capacity. Novatek has a 60% interest in the scheme, while TotalEnergies, CNPC, CNOOC and a joint venture between Mitsui and JOGMEC have 10% each.
Novatek signed a 15-year deal to supply a cumulative 3mn mt of LNG to another Chinese company Shenergy in February.