The LNG project will have three plants with an aggregate production capacity of around 19.8Mtpa. Credit: scyrene.

Saipem has secured a €2.2bn ($2.5bn) contract in a joint venture (JV) with Turkish oil and gas services firm Renaissance for the provision of onshore engineering and construction services for Russian company Novatek’s Artic LNG 2 project.

Saipem will lead the JV with a 50% shareholding and will receive approximately €1.1bn ($1.25bn) as its share of the contract.

Under the contract, the JV will construct three liquefied natural gas (LNG) plants, each with a capacity of around 6.6 million tonnes per annum (Mtpa), in the Tazovsky District, in the autonomous administrative region of Yamal-Nenets, in the western part of the Gydan Peninsula.

The LNG plants will be installed on concrete gravity based structures (GBS). The project also includes LNG storage facilities with an aggregate capacity of 687,000m³.

The contract includes designing and building three 30m-high concrete GBSs on a surface of 330m x 152m.

Saipem noted that the fabrication of the concrete GBSs will be carried out in two dry docks at a Novatek provided facility in Murmansk.

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Once the fabrication work is completed, the structures will be towed and installed in the Gydan Peninsula.

“The partners are developing the project, which will unlock the more than seven billion barrels of oil equivalent (boe) of hydrocarbon resources of the onshore Utrenneye gas and condensate field.”

Saipem CEO Stefano Cao said: “The awarding of this contract demonstrates how Saipem is fully integrated into the process of energy transition and represents a further success in the high added value LNG sector in which we have been operating for many years and in which, in the recent past, we have obtained important contracts.

“Finally, the signing of this contract reinforces the presence of Saipem in Russia, a country in which the company has an important track record in the realisation of both onshore and offshore infrastructures.”

The contract is part of a strategic partnership agreement that was signed by Saipem and Novatek in 2016 for LNG project works.

Novatek owns a 60% interest in the Artic LNG 2 project and Ekropromstroy holds the remaining 40%.

The partners are developing the project, which will unlock the more than seven billion barrels of oil equivalent (boe) of hydrocarbon resources of the onshore Utrenneye gas and condensate field.

The Artic LNG 2 project is expected to have a production capacity of around 19.8MMtpa. Novatek is planning to begin production from the first train by the end of 2023.

In May, Total signed an agreement with Novatek to acquire a 10% working interest in Arctic LNG 2.