Russian gas producer Novatek is expected to select Italian contractor Saipem to build offshore platforms for its second liquefied natural gas (LNG) facility in the Arctic, a news report has claimed.
The company is aiming to produce as much LNG as the world’s biggest exporter Qatar.
As part of this strategy, there are plans to build a second plant, known as Arctic LNG 2, on the Gydan Peninsula that juts into the Kara Sea.
Reuters cited four industry sources who named Saipem as the preferred contractor.
“The contract is not signed yet, (but Saipem) are expected to become a subcontracting party for the Technip-Linde-NIPIGas consortium,” one source close to the project said.
A second source familiar with the details confirmed that Saipem was expected to work as a subcontractor to build the LNG units, which will be gravity-based platforms near the coast held in place on the seabed with ballast.
Novatek and Saipem did not respond to requests for comment.
In May, Novatek signed an agreement with Technip, Linde and the Russian Research and Design Institute for Gas Processing (NIPIGas) to design and develop gravity-based LNG facilities for Arctic LNG 2. Novatek has also agreed to buy Linde’s licence for gas liquefaction technology for the plant.
The fact that Novatek has now chosen all four main contractors suggests the Russian company is serious about proceeding with the project, which is expected to start operating in the early 2020s.
One source with direct knowledge of the matter said Novatek would start drilling its first exploratory gas wells in 2018.
Two more sources, one close to Saipem and a Western energy source, said the gravity-based structures should allow Novatek to build the plant more cheaply than its first Arctic LNG project at Yamal. They did not give an estimate of the savings.
Arctic LNG 2 is expected to have an output matching or exceeding Yamal. Its first line, which will produce 5.5 million tonnes of LNG a year, is expected to be launched later this year.
Yamal will be producing 16.5 million tonnes by 2019.
Russia has just one operational LNG facility, run by Gazprom on the Pacific island of Sakhalin.