The Agreement builds on the MOU signed by the parties in October 2019 and establishes the key commercial terms for the annual supply of up to 1 million tons of LNG from the Arctic LNG 2 project for a term of 15 years.
The LNG will be delivered on a DES basis to Zhejiang Energy’s LNG terminals in China, including feedstock for the buyer's new gas-fired power generation facilities.
Leonid Mikhelson, NOVATEK’s CEO, said:
- The agreement is consistent with our commercial LNG strategy to diversify our client base and target end consumers in the rapidly developing Asian Pacific market
- The fast-growing Chinese market is a key region in our LNG marketing strategy, and we plan to further increase our supplies of cleaner-burning LNG to assist China in reaching its net zero targets by 2060
The Agreement established the key commercial terms for the long-term supply in excess of 0.5 million tons of LNG per annum from the Arctic LNG 2 project.
The LNG will be delivered to a number of locations in East Asia.
Leonid Mikhelson noted:
- The market for LNG in the Asia Pacific region has fully recovered from the impact of the coronavirus pandemic and has now resumed a stable growth phase
- This Agreement is consistent with NOVATEK’s commercial strategy to build a sustainable LNG sales portfolio including both end customers and portfolio players in the Asia Pacific market, with LNG delivered all-year-round along the Northern Sea Route