Investment Portal of the Arctic Zone of the Russian Federation

Arctic LNG-2: a factory with home delivery

Ecology, gas and production in the Yamal North

13 june 2023

In late May, Novatek's LNG Offshore Construction Centre reported that the first floating plant for the Arctic LNG-2 project was ready. In July this year, it will be loaded onto ships and shipped to its home base, the Gydan Peninsula on the Yamal, where the Utrenneye field is located. The platform weighs 600,000 tons and is 150 m long and 3007m wide. According to Novatek, these are the largest floating OGT (gravity-based) platforms in the world. The Arctic LNG-2 project, costing more than $21.3 bn, will include three such plants.

Your delivery is 2,000 km away. Please, expect...

The choice of CDP platforms as the basis for the Arctic LNG-2 production lines has two reasons.

The first is commercial, related to the allocation of production capacity in the AZRF. It is much easier to assemble a floating plant at a large production facility, such as the LNG Construction Centre in Murmansk, and then tow it to its home base. The platform is structurally a concrete base on which 14 technological modules are mounted. A ballast is 'tied' to the plant for the duration of transport to provide positive buoyancy. When the CDP platform is delivered to the site, it will be untied and the concrete part of the plant will sink to the seabed by its own weight, firmly entrenched in it.

But that's not all—the second reason for choosing CDP platforms was the environment. Usually, the construction work of large resource extraction projects in the polar regions inevitably has a significant impact on the environment through the large-scale use of construction machinery, heavy transport loads, etc. Transferring some of these processes to the industrial region has reduced the burden on the environment. Combined with the fact that the process lines of the Arctic LNG-2 plants are built to meet modern environmental requirements, the project promises to have a fairly low impact on Yamal's fragile ecosystem. Thus, according to preliminary calculations, greenhouse gas emissions per ton of LNG produced will be more than 30% below the industry average.

In total, the three processing lines will produce about 19.8 mn tons of liquefied natural gas and 1.6 mn tons of stable gas condensate per year. The total storage capacity for LNG will in turn be 687,000 m3 and 225,000 m3 for SGC. The main production facilities will be located offshore, while the central control room, power substation, ice formation control systems and a number of other buildings will still be located onshore. The first processing line is promised to start in 2023.

Prospects for gas development in ice

The Arctic LNG-2 project is strategically positioned to deliver liquefied gas equally easily to both Europe and Asia. Tankers are planned to carry 20% of the liquefied gas to the Murmansk hub and 80% will go to Kamchatka. By the way, goods other than LNG must be brought to the East under the guaranteed transport volume. At any rate, this basis enabled Novatek Corporation to enter into an agreement with Rosatom in 2023 to provide year-round navigation in the eastern part of the NSR. This will include coastal shipping, including as part of the Northern Supply, the transport of commercial goods and much more.

They are already building their own fleet for Arctic LNG-2 itself. These will be 15 Arc-7 ice-class vessels that will be able to operate in the Arctic Ocean. Along with them will come two floating LNG storages, one of which has almost reached Murmansk. This is the 400-metre Saam FSU giant, which can store up to 200,000 cubic m of liquefied gas. It will anchor near Murmansk, shortening the sea route for tankers by about 1,000 nautical miles and removing the need for client ships to enter ice-covered waters. A second such vessel is to dock near Kamchatka, making it easier for eastern partners to acquire LNG.

Overall, the Arctic LNG-2 project is in line with the latest thinking on how to organise the logistics of transportation and extraction of minerals.

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