TotalEnergies acquires 10% of Arctic Transshipment LLC from Novatek and partners on LNG decarbonisation, hydrogen and renewables

Source: press release, 3 June 2021

Chairman and CEO of TotalEnergies, Patrick Pouyanné
Chairman and CEO of TotalEnergies, Patrick Pouyanné (photo: TotalEnergies)

TotalEnergies has signed a Sale and Purchase Agreement (SPA) with Novatek to acquire 10% of Arctic Transshipment LLC, a wholly owned subsidiary of Novatek, which owns and will operate two liquefied natural gas (LNG) transshipment terminals being built in the Murmansk and Kamchatka regions of Russia.

These terminals will provide export logistics services, including to the Arctic LNG 2 project under construction, and will each initially include a 360,000 m3 floating storage unit (FSU) and two ship-to-ship transfer kits (STS). They will allow for the transshipment of LNG from Arc7 ice class LNG carriers, which provide transport on the iced waters of the Arctic Ocean, to conventional LNG carriers, which take care of the remaining delivery. By limiting the use of Arc7 ice class LNG carriers, this optimisation of the logistic reduces the costs and CO2 emissions of the LNG transport.

“We are pleased to have signed this acquisition with Novatek, our long-standing strategic partner, which is in line with our strategy of integration along the entire LNG value chain. These terminals mark an important step in the advancement and consolidation of the Arctic LNG 2 project and will contribute to the safe and sustainable export of cargoes from our existing and developing Yamal projects,” said Patrick Pouyanné, Chairman and CEO of TotalEnergies, at the agreement signing during the Saint Petersburg International Economic Forum.

Additionally, TotalEnergies and Novatek have signed a memorandum of understanding (MoU) to jointly work on sustainable reductions of the CO2 emission resulting from the production of liquefied natural gas (LNG) including with the use of renewable power, to develop large-scale carbon capture and storage solutions (CCS) and to explore new opportunities for developing decarbonised hydrogen and ammonia. This partnership will leverage the significant low-cost resources of the Yamal and Gydan peninsulas and their large potential for geological storage.

Each partner will bring its best-in-class technologies and combine its know-how to explore and develop projects that will help reduce the carbon footprint of the LNG value chain, using:

  • carbon capture and storage (CCS),
  • energy efficiency,
  • renewable sources of power,
  • marketing of carbon-neutral LNG,
  • and clean hydrogen and ammonia.

“We are very pleased to begin a new chapter in our cooperation with our long-standing strategic partner Novatek. Our two companies are joining forces to deliver sustainable solutions to reduce emissions from our LNG projects and to provide low carbon LNG to our customers,” said Patrick Pouyanné, Chairman and CEO of TotalEnergies, during his visit to the Saint Petersburg International Economic Forum. “In line with our transformation strategy and our ambition to be a major player in the energy transition, we want to be a leader in low-carbon LNG.”

TotalEnergies is a 19.4% shareholder in Novatek and holds a 20% stake in Yamal LNG, a project that started up in December 2017 and produced more than 18.8 million tons of LNG in 2020. The company also holds a 10% stake in Arctic LNG 2, a project currently under construction and on track to deliver its first LNG cargo in 2023.