The privately owned company, alongside Russia Energy Minister Alexander Novak, announced Thursday that it made a final investment decision on the project at the Eastern Economic Forum in Russia’s Pacific port of Vladivostok. The move commits it to proceed with financing and engineering contracts for the development, which will cost $21 billion and is expected to be completed between 2023 and 2025, Novak said.
Russia’s aim is to compete with the world’s top producers, including the U.S. and Australia. The country had an 8% slice of the global LNG market last year, which it wants to boost to 20% by 2035.
Novatek, whose biggest shareholders include Russian billionaires Leonid Mikhelson and Gennady Timchenko, as well as France’s Total, became Russia’s top LNG producer after bringing online two years ago Yamal LNG, its first plant in the Arctic.
Earlier this year, Novatek agreed to sell a 20% stake in Arctic LNG 2 to China’s Cnooc Ltd. and a unit of CNPC. It also sold 10% to a consortium of Japan’s Mitsui & Co. and state-backed Jogmec. Total holds another 10% in the project.
Novatek and its partners — including France’s Total SA, Japan’s Mitsui & Co. and China National Petroleum Corp. — are seeking to tap booming demand for LNG, especially in China, India and across developing countries. Arctic LNG 2 is now set to compete against projects from the U.S. to Mozambique and Papua New Guinea for construction resources and customers.