In its final investment decision, the French oil and gas major Total made a commitment to develop the onshore part of the Yamal LNG project within Russia.

At the present moment, Total has a 20-percent stake in the venture, which is estimated to contain reserves of as much as five billion barrels of oil equivalent. The LNG project on the Yamal peninsula envisions the construction of an LNG-processing plant capable of liquefying 16.5 million tons per year. The expenditures for the facility’s construction now stand at USD27 billion.

According to Total’s president for upstream development Yves-Louis Darricarrere, the energy company’s implementation of the Yamal LNG project is bound to solidify Total’s worldwide asset portfolio, allowing the major to augment steadily its production level following 2017. In addition, as summarized by the high-ranking executive, the investment decision would strategically position Total in a promising region of Russia with access to tremendous gas resources.

Commentators on the transaction noted that Yamal LNG achieved considerable advancement in the recent several months, such that Total’s decision makers were moved by Novatek’s intensified efforts to create a high-caliber LNG operation in the northern region of Russia.

The Yamal LNG project envisions the development of the South Tambey gas condensate field on the Yamal peninsula. The operator planned to utilize three LNG trains, each with capacity of 5.5 million tons per year. The first train is slated to begin operations in

2017. Additional infrastructure will consist of gas storage tanks and a harbor at the Sabetta port. The construction of a significant share of the project’s infrastructure, including the airport, the harbor, and the living quarters, is already underway. As many as 3,000 construction workers are presently on site. The Yamal LNG project is calculated to use 16 LNG carriers with ice-breaking capabilities to supply the gas to global markets.

The Yamal LNG venture has two principal owners: Novatek has an 80-percent stake in the project, while Total has a 20-percent stake. Approximately 70 percent of Yamal LNG’s yearly capacity has already been sold to Asian consumers at prices that are based on the price of oil. The remaining 30 percent of production is under contract to European customers.