Arctic LNG 2: an ambitious gas project in Russia

09/17/2021

Artic LNG 2 Card

The Arctic LNG 2 project will consist of three liquefaction trains capable of producing 19.8 Mtpa of liquefied natural gas (LNG) and 1.6 Mtpa of initial condensate.

The project has been set up in the Gyda Peninsula in the western Siberia region of Russia. Its location on the banks of the Ob river positions it opposite the Yamal LNG site.

The limited liability company (LLC) Arctic LNG 2 operates and owns all the assets. It is a joint venture including TotalEnergies (10%), Novatek (60%), Chinese corporations : CNPC (10%) and CNOOC (10%), and Japan Arctic LNG (a consortium formed by Japanese companies Mitsui and JOGMEC) (10%).

The Arctic LNG 2 project taps the potential of the giant Utrenneye onshore field, providing volumes in excess of 7 billion barrels of oil equivalent (boe).

In 2018, the front-end engineering design (FEED) was completed and work began on site preparation with the construction of early-phase power supply facilities, the drilling of production, and the construction of the quayside.

The participants in the Arctic LNG 2 project approved the final investment decision (FID) for the project in September 2019.

Construction is ongoing, and the first train of the project is scheduled to start up in 2023, with the second train in 2024 and the third train in 2025.

An Innovative Project at the Core of Our European and Asian Strategies

In order to reduce our environmental footprint but also the exposure of construction staff to Arctic conditions and optimize costs through industrialization, the Arctic LNG 2 project has taken an innovative approach with the installation of liquefaction facilities on board concrete gravity-based structures (GBS). Three GBS for Arctic LNG 2 are to be constructed in a purpose-built new yard in the Murmansk area, the Novatek Murmansk Plant (NMP), and transported to the Gyda shore for anchoring. Each GBS will be equipped with LNG storage tanks and condensate and offloading facilities.

The unique location of the Gyda Peninsula is conducive to flexible and competitive logistics: it offers year-round LNG shipping to transshipment facilities in the Murmansk area and in Kamchatka. From there, LNG will be delivered to the European and Asia-Pacific markets.

Twenty-one new Arc7 LNG carriers are being built for the Arctic LNG 2 project and were designed for year-round navigation along the Northern Sea Route.

Preservation of the Environment: a Key Priority

Preservation of the unique Arctic environment is one of the cornerstones of the project’s activities, a consideration factored into all stages of project development, from concept selection to execution and operations. The Arctic LNG 2 project boasts the following qualities, ensuring that impacts on the environment and biodiversity are kept to a minimum: 

  • Minimized environmental footprint thanks to the use of GBS to accommodate process facilities.
  • Zero-discharge of industrial wastewater into the Gulf of bay and re-injection of treated wastewater deep into subsoil in compliance with regulatory requirements.
  • Minimized energy consumption for gas liquefaction thanks to the project’s location in a cold environment, use of mixed refrigerants for adaptation to ambient conditions and heat and cold recovery.
  • High fuel energy efficiency thanks to the use of next-generation aeroderivative gas turbines for power generation.
  • LNG production more than 30% below the sector average in terms of GHG emission intensity thanks to minimized energy consumption and high fuel efficiency.
  • Low methane emission intensity thanks to the recycling of boil-off gas either for reliquefication or power generation, as well as no routine gas flaring.
  • Use of state-of-the-art LNG carriers which will be run on LNG, the cleanest maritime fuel.
  • Use of cutting-edge process technology and monitoring for carbon emissions across the entire LNG value chain.

The Arctic LNG 2 project also carried out a comprehensive Environmental, Safety and Health Impact Assessment (ESHIA). In accordance with the ESHIA and the most stringent international performance standards for environmental and social protection, the Arctic LNG 2 project has defined a set of measures to be implemented before start-up of the project, seeking to minimize the environmental and social footprint and to deliver a positive impact for biodiversity and the surrounding communities. These measures will be monitored by third-party organizations.

The project’s biodiversity protection strategy includes the following plans and programs, currently under development:

  • A Biodiversity Conservation Management Program (BCMP) in accordance with the recommendations of the Ministry of Natural Resources and the Environment of the Russian Federation.
  • A Biodiversity Management Plan (BMP) setting out the commitments and measures identified in the ESHIA in order to avoid, minimize and compensate the impacts on biodiversity and ecosystems.
  • A Biodiversity Action Plan (BAP) setting out the specific commitments and actions taken by the project in accordance with International Finance Corporation (IFC) Performance Standard 6 requirements for No Net Loss in Natural Habitats and a Net Gain in Critical Habitats.
  • A Biodiversity Monitoring and Evaluation Program (BMEP) to measure the outcomes of the biodiversity plans implemented.