TechnipFMC has firmed up its engineering, procurement, construction and commissioning contract for Novatek’s planned Arctic LNG 2 liquefied natural gas development in Russia, writes Eoin O'Cinneide.

The Russian independent this week confirmed the significant deal that will see UK-based TechnipFMC work on the three-train project on the Gydan Peninsula.

Novatek did not disclose any deal value and London-based TechnipFMC had not commented on the contract by the time Upstream went to press.

The deal marks a return to the Russian Arctic for TechnipFMC, which also executed Novatek’s Yamal LNG development, where all three trains are now operational after coming online ahead of schedule.

Announcing the Arctic LNG 2 deal, Novatek chairman Leonid Mikhelson said: “The team, which implemented the unique Yamal LNG project in record time and on budget, has now joined an even larger and more innovative project.

“We are confident that the accumulated experience of mutual cooperation on the construction of LNG plants in the Arctic zone will also ensure the successful and timely implementation of our new project Arctic LNG 2.”

Arctic LNG 2 will involve three trains of 6.6 million tonnes per annum capacity each. Novatek is going with concrete gravity-based structure (GBS) platforms for the development, with a grouping of Italy’s Saipem and Renaissance of Turkey late last year landing the onshore engineering and construction deal for the platforms.

In 2017, Novatek signed an agreement with a consortium made of TechnipFMC, Linde and Research and Design Institute for Gas Processing (NIPIGas) for the design and development of future LNG plants based on GBS platforms for the project.

It was thought that Arctic LNG 2 could be up and running by late 2022. However, Novatek said this week that the contract terms with TechnipFMC “provide for the launch of the first train of the project in 2023”.

The three trains, together with 19.8 million tpa of capacity, will commercialise gas reserves of the Utrenneye, also known as Salmanovskoye field, on the Gydan Peninsula in West Siberia.

Total investments in the project are estimated in excess of $25 billion.

Earlier this year, Novatek finalised the sale of a 10% stake in the project to French supermajor Total, leaving the Russian operator on 40%.

Novatek has said it is aiming to farm down to 60%.

It has signed deals with China National Petroleum Corporation and China National Offshore Oil Corporation to give each a 10% stake, leaving another 10% stake yet to be allotted.

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TechnipFMC confirms Arctic LNG 2 deal