Russian independent Novatek has unveiled plans to build a new liquefied natural gas plant near the port of Sabetta on West Siberia's Yamal Peninsula that will be based mostly on local components, writes Vladimir Afanasiev.

Earlier this week in Moscow during a meeting with potential Russian suppliers and contractors, Vladimir Khurtin, executive director of Novatek subsidiary Obsky LNG, said the plant will have three liquefaction trains and will be based on Novatek’s own Arctic Cascade liquefaction process.

Each train will have capacity of 1.6 million tonnes per annum, bringing total output to 4.8 million tpa.

The three trains will be commissioned between the fourth quarter of 2022 and end of 2023, according to Novatek's plans.

Khurtin said the company hopes Russian suppliers and contractors will become more active in bidding for contracts at Obsky LNG, which will use the port shipping infrastructure of Novatek’s first LNG development, Yamal LNG, once general details of the new plan become public. He added that gas for the proposed plant will come from the Upper Tiuteyskoye and West Seyakhinskoye fields, both of which are about 80 kilometres from Sabetta and have combined estimated recoverable reserves of 157 billion cubic metres of gas.

The decision to proceed with the new LNG plant comes as Yamal LNG is working to complete the construction of its fourth train, also using the Arctic Cascade process, in the beginning of 2020.

Novatek described Yamal LNG Train 4 as experimental as it is set to demonstrate the ability of the company to use Russian-built compressors and other core components to underpin its liquefaction process.

Yamal LNG Train 4's capacity has been set at about 1 million tpa, to add to the total output of 16.5 million tpa from the plant’s three operational trains. Earlier, a Novatek executive said the company believes Arctic Cascade trains will be cost effective as they are simple to build and operate, with savings coming from their reliance on atmospheric cooling in low temperatures, which prevail in Russia's northern regions.

However, because Russian manufacturers are unable to produce high-power compressors, this limits the ultimate annual capacity of each train.

Novatek is expected to receive multi-billion dollar payments for selling minority stakes in its other LNG project, Arctic LNG 2 on the Gydan Peninsula, to international partners later this year, which will help meet Obsky LNG's construction costs, industry analysts in Moscow suggested.

Both Arctic LNG 2 and Obsky LNG are expected online almost in the same timeframe, with final investments decisions on the two developments planned to be passed before the end of this year.

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Novatek plans new LNG plant