Russian natural gas producer Novatek has shipped its first cargoes of liquefied natural gas (LNG) from its $27bn Yamal LNG project in Siberia to China via the Northern Sea Route.
The Yamal plant – which is being jointly developed by Novatek and French oil major Total – started exporting in December 2017, but shipments on ice-class tankers had only sailed to Europe thus far.
The voyage from the Port of Sabetta, on the Yamal peninsula, to the destination port near Nantong, China was completed in 19 days. The traditional eastern route through the Suez Canal and the Strait of Malacca takes around 35 days to complete.
“The Northern Sea Route ensures shorter transportation time and lower costs, which plays a key role in developing our hydrocarbon fields on the Yamal and Gydan peninsulas,” said Novatek chairman Leonid Mickhelson in a statement. “Our vast high-quality, conventional natural gas resource base combined with low capital intensity and operation and transportation costs positions Novatek’s LNG projects among the most competitive projects globally.”
China’s National Energy Administration said that China National Petroleum Corp (CNPC) will begin sourcing at least 3 million tonnes of LNG from Yamal starting next year. The plant will utilize a fleet of 15 ice-class LNG tankers with a cargo capacity of more than 170,000 cubic metres to transport the gas to key consuming regions.
According to Reuters, Novatek plans to develop another large-scale LNG project near Yamal, which will start production around 2022 or 2023. The gas company is allegedly in talks with CNPC and China’s Silk Road Fund about taking a stake in the new plant.