Arctic LNG 2 Terminal

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.

Arctic 2 LNG Terminal is a proposed LNG terminal in Gydan Peninsula, Russia.


The map below shows the approximate location of the proposed terminal, on Gydan Peninsula, in Tazovsky District, Yamalo-Nenets Autonomous Okrug, across the Gulf of Ob from Yamal LNG Terminal.

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Novatek announced Spring 2017 its intentions to build the Arctic 2 liquefied natural gas (LNG) liquefaction terminal in Gydan Peninsula in Western Siberia, Russia. Arctic LNG 2 would export gas from Novatek's Salmanovskoye (Utrenneye) and Geofizicheskoye fields.[1] The project's other shareholders are Total (10%), Japan Arctic LNG (10%) and the Chinese companies CNOOC (10%) and CNPC (10%).

The plan is for three 5.5-million-ton-per-year (mtpa) stages to be built: Stage 1 to be completed in 2022, Stage 2 in 2023, and Stage 3 in 2025.[2] The estimated cost is US$21.3 billion. Construction is scheduled to begin in 2018.[3][4] Of the total cost 73.43% will be paid for the Novatek and 26.57% by the Russian Federation.[5]

Reports in July 2017 indicated that Saipem was expected to be chosen as construction contractor on the project.[6]

In February 2019 Novatek announced that it had signed construction agreements with Siemens, a German conglomerate, as well as Saipem of Italy and Renaissance Heavy Industries of Turkey.[7] In June 2019 the federal government approved plans to build the terminal in seven stages.[5]

The final investment decision for the project was reached in September 2019. Financial closure, expected to involve 30% debt financing, is not expected until 2020.[8] IJGlobal identifies only China Development Bank as a project financier (no financial figures are provided).[9] In July 2019, the Japan Bank for International Cooperation granted a loan of up to 125 million euros to allow the Japan Arctic LNG company (a Dutch entity) to acquire a 10% stake in Arctic LNG 2. This loan is co-financed with undisclosed private financial institutions.[10]

In March 2020, Novatek claimed in the media that the project remains on track despite turbulence in the commodities markets.[11] According to Hiroshige Seko, Japan’s Minister of Economy, Trade and Industry, “Arctic LNG 2, based on its costs, is the largest project in the history of Japanese-Russian relations”.[12] Also in March it was reported that Russian president Vladimir Putin had introduced into law fresh tax relief for new LNG projects in the Arctic. Novatek was reported to be the primary beneficiary of this new "zero-rate extraction tax".[13]

Coronavirus outbreak

Despite more than 200 construction workers contracting the coronavirus at Novatek's Kola Yard supply base, which is being built to support the planned Arctic LNG 2 Terminal, the company said on April 15, 2020 that work at the site will continue. Belokamenka, where Kola Yard is located, in the Murmansk region has the fastest-growing rate of coronavirus in northern Russia, with the outbreak thought to be most severe within the construction site. The Barents Observer reported that there are about 4,600 workers on the site in Belokamenka, where fly-in, fly-out employees, many of them foreign nationals, are housed in cramped conditions in barracks.[14]

In June 2020, Novatek publicised that, in spite of the impact of COVID-19, the project's development remained on schedule and was estimated to be 19% complete.[15]

Environmental impacts from heavy dredging works

While heavy environmental impacts have occurred at Novatek's associated Yamal LNG Terminal project,[16] the initial environmental assessment for Arctic LNG 2 was approved in early 2018 by the Yamal government and representatives of the Yamal Association of Indigenous Peoples.[17]

However, Russian environmentalists have expressed concerns over the expected impacts on marine life owing to the massive dredging work that will be carried out by the project promoters to remove approximately 80 million tons of sea bottom from the vicinity of the project. According to researchers at the Ural Institute of the Ecology of Flora and Fauna, the dredging could result in several marine species unique to the region becoming extinct, such as sturgeon, whitefish, smelt and freshwater cod.[18]

Project Details

  • Owner: Arctic LNG 2 (Novatek 60%, Total 10%, Japan Arctic LNG 10% and the Chinese companies CNOOC 10% and CNPC 10%)[19]
  • Parent: Novatek
  • Location: Gydan Peninsula, Tazovsky District, Yamalo-Nenets Autonomous Okrug, Russia
  • Coordinates: 71.085, 73.677 (approximate)
  • Capacity: 19.8 mtpa, 2.84 bcfd[20]
  • Status: Proposed
  • Type: Export
  • Trains: 3
  • Start Year: 2022 (Train 1), 2024 (Train 2), 2026 (Train 3)[21]

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Articles and resources


  1. "Novatek Looks to Build Second Arctic LNG Plant," The Maritime Executive, March 29, 2017.
  2. "2017 World LNG Report" International Gas Union, Accessed June 20, 2017.
  3. "Yamal-Nenets government approves Salmanovskoye field development project for Arctic LNG-2," The Arctic, June 23, 2017.
  4. Business Potential in Russian Arctic Oil and Gas Projects, Sozvezdye Association of Oil & Gas Suppliers presentation, May 2016.
  5. 5.0 5.1 [Одобрен проект строительства терминала «Утренний» для проекта «Арктик СПГ-2»], Glavgosexpertiza, Jun. 10, 2019
  6. Saipem seen getting work in Novatek's Arctic LNG 2 project, Reuters, 24 July 2017.
  7. Novatek signs construction contracts for Arctic LNG 2, as Yamal project hits milestone, Arctic Today, Feb. 6, 2019
  8. "FID for Russia's Arctic LNG 2," IJGlobal, Sep. 5, 2019.
  9. "Arctic LNG 2," IJGlobal, accessed March 2020.
  10. "Loan for Acquisition of Interest in Arctic LNG 2 Project in Gydan Peninsula, Russia," JBIC, Jul. 2, 2019.
  11. "Arctic LNG 2 project on track despite market volatility," upstream, Mar. 16, 2020.
  12. "Novatek Greenlights $21 Billion Russian Arctic LNG 2 Plant," Bloomberg, Sep. 5, 2019.
  13. "Russia introduces tax relief for new Arctic LNG projects," Reuters, Mar. 18, 2020.
  14. "Belokamenka has the fastest-growing coronavirus outbreak in northern Russia," The Barents Observer, Apr. 15, 2020.
  15. Lydia Woellwarth, "Virtual meeting held for Arctic LNG 2 project," LNG Industry, Jun. 12, 2020.
  16. "Russia’s grand LNG project takes its toll on Arctic environment," The Barents Observer, Jan. 8, 2018.
  17. "Arctic gas plant threatens native peoples," China Dialogue, Apr. 3, 2018.
  18. Atle Staalesen,"More than 100 million cubic meters of sea bottom is removed from this Arctic bay to make way for grand natural gas project," The Barents Observer, Jun. 17, 2020.
  19. Final Investment Decision Made on Arctic LNG 2 project, Novatek press release, Sep. 5, 2019
  20. Russia's Novatek produces commissioning LNG from Yamal LNG train 3: official, S&P Global Platts, Nov. 22, 2018
  21. Construction of Novatek’s Arctic LNG 2 Project Ahead of Schedule, High North News, Apr. 16, 2020

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