On May 24, 2018, Novatek’s management board chairman Leonid Mikhelson and Total’s chairman and chief executive officer Patrick Pouyannе signed a binding agreement for working together on the Arctic LNG 2 project.

The agreement provides for Total’s acquisition of a 10-percent participation interest in the project, together with a five-percent option that may be exercised in case Novatek decides to decrease its participation interest below 60 percent. The project’s value has been estimated at 25.5 billion dollars.

“Total is one of the leading global LNG players and a valued partner of Novatek with a long and successful track record of mutually beneficial cooperation. We welcome its participation in the company’s Arctic LNG 2 project,” said Leonid Mikhelson during the ceremony marking the agreement’s signing. Mr. Mikhelson went on to say, “The company’s prolific hydrocarbon resource base in the Yamal and the Gydan peninsulas offers an unparalleled opportunity to participate in scalable LNG projects that will offer competitively-priced LNG to key consumer markets. The accession of a partner like that to Arctic LNG 2 at an early stage speaks to the economic attractiveness of LNG projects on the Yamal and the Gydan peninsulas.”

The Arctic LNG 2 project envisages constructing three LNG trains at 6.6 million tons per annum each, using gravity-based structure (GBS) platforms. The project relies on hydrocarbon resources at the Utrenneye field. As of December 31, 2017, the Utrenneye field’s reserves under the Russian reserve classification totaled 1,582 billion cubic meters of natural gas and 65 million tons of liquids. Arctic LNG 2 already has an LNG export license.

Novatek is one of the largest independent natural gas producers in Russia. Founded in 1994, the company is engaged in the exploration, production, processing, and marketing of natural gas and liquid hydrocarbons. The company’s upstream activities are concentrated mainly in the prolific Yamal-Nenets autonomous region, which is the world’s largest natural gas producing area. The Yamal-Nenets region accounts for approximately 80 percent of Russia’s natural gas production and approximately 16 percent of the world’s gas production. Novatek’s stock is listed in Russia on the Moscow Exchange (MOEX) and on the London Stock Exchange (LSE) under the ticker symbol NVTK.