The Arctic LNG-2 Project development includes an LNG plant with three liquefaction trains on gravity-based structures. Credit: Alexei Babushkin.
The ground breaking ceremony of the first production line for LNG on gravity-based structures was held in July 2023. Credit: Konstantin Zavrazhin.
LNG transportation will be handled by 15 Arc7 ice-class LNG tankers. Credit: donvictorio/

The Arctic liquefied natural gas (LNG) 2 project located in Gydan, Northern Russia, is being developed by its owner OOO Arctic LNG.

OOO Arctic LNG is a company formed by NOVATEK (60%), TotalEnergies (10%), CNPC (10%), CNOOC (10%) and the Japan Arctic LNG (10%), which is a consortium of Mitsui and JOGMEC.

The project involves the development of the Utrenneye onshore oil and gas condensate field and an LNG liquefaction plant in the Gydan peninsula.

The final investment decision for the project was approved in September 2019. The total investment required is estimated at $21.3bn. The first stage of development is expected to commence operation in late 2023.

Location of the Arctic LNG 2 Project

The project is located in the Salmanovsky licence area in the western part of the Gydan Peninsula. It is located approximately 170km and 240km from Gyda and Antipayuta rural areas, respectively.

Arctic LNG 2 development background

The subsoil licence for the Utenneye field was second in 2014. The offshore super facility construction centre for the construction of gravity-based structures (GBS) for the project was established in 2017.

The project is planned to be developed in stages beginning with an exploration of hydrocarbons at the Utrenneye oil and gas condensate field.

The front-end engineering and design (FEED) of the project was completed in 2018 and a total of 79 production wells were drilled by the end of 2022.

Arctic LNG 2 details

The project involves the construction of three 6.6 million tonnes per annum (Mtpa) liquefaction trains using GBS platforms. The gravity-based structures will minimise the capital cost and the project footprint in the Arctic zone of Russia.

Three GBS platforms are planned to be installed. The first two structures will consist of two 114,500m3 LNG storage tanks and one 98m3 ethane storage tank. The third GBS will consist of two 114,500m3 LNG storage tanks.

The Utrenniy LNG and SGC terminal will provide logistics services for the project’s gas carriers and tankers, LNG and SGC offloading. It will also provide cargo storage, temporary berthing facilities and other logistics services during the pre-operation and operation phases. The LNG terminal’s facilities and operational areas will be used for the project as well as for federal uses.

The project also included the development of a dedicated airport with a 1,550m-long runway to receive small to medium aircraft. The first plane landed at the airport in June 2021.

Utrenneye onshore oil and gas condensate field details

Discovered in 1979, the Utrenneye onshore oil and gas condensate field is located in the Gydan Peninsula in YNAO, approximately 70km across Ob Bay from the Yamal LNG plant. The field will serve as the resource base of the project.

The field includes a total of 213 wells drilled from 20 well pads, of which 191 wells are gas condensate wells.

The development at the field includes complex gas treatment plants, a preliminary gas processing terminal, a gas gathering network and pipelines. The treated gas will be sent to the LNG complex through separate pipelines.

The field will feature a 12MW gas-fired power plant, power transmission lines, an energy rescue centre, water supply and sewage systems, temporary accommodation camps and other facilities.

An energy centre to provide power to the project is also planned to be developed to bridge the power supply gap until the GTPP becomes operational.

The proven and probable 2P reserves at Utrenneye field were estimated at 1,457 billion cubic metres of gas and 89 million metric tonnes of condensate as of 2022.

Construction details

The gravity-based structures and topsides are being constructed in the NOVATEK-Murmansk shipyard. The first LNG production line on a gravity-based platform became operational in July 2023, while the second production line is under construction.

LNG Transportation details

The LNG and SGC from the LNG plant will be transported to Europe (westbound) via 15 Arc7 ice-class LNG tanker fleets being built in the Zvezda Shipbuilding complex.

The 81,000t vessels will have a length of 300m and a moulded beam width of 48.8m and are equipped with a Mark III membrane-type LNG storage system.

The transportation will be via the Northern Sea Route to the Asian Pacific region.

Off-take agreements

A sale and purchase agreement (SPA) was signed with ENN LNG (Singapore), a subsidiary of ENN Natural Gas, in January 2022 to offtake 0.6Mtpa of LNG for 11 years.

An offtake agreement signed with Zhejiang Energy was also concluded in January 2022 to supply 1Mtpa of LNG for 15 years.

A 20-year SPA with all the partners involved in the joint venture of the project was concluded in April 2021. The partners agreed to offtake LNG based on their respective ownership share in the project.

NOVATEK also signed heads of agreement supply contracts with Vitol and Repsol in April 2019 for the supply of 1Mtpa of LNG from the project along with other projects of NOVATEK for 15 years.

Shenergy Group signed a long-term agreement in February 2021 to offtake more than 3Mt of LNG for a term of 15 years.


The loan amount of $10.71bn (€9.5bn) was secured from Russian and international banks for 15 years in November 2021.

Credit facility agreements of $2.82 (€2.5bn) were signed with Chinese financial institutions including China Development Bank and the Export-Import Bank of China.

The members of the Organisation for Economic Co-operation and Development (OECD) signed a credit facility to provide $2.82 (€2.5bn).

PJSC Sberbank, Gazprombank and its subsidiary Bank GPB International, State Development Corporation and Bank Otkritie Financial Corporation agreed to provide $5.7bn (€4.5bn).

Contractors involved

A long-term charter agreement was signed with SMART LNG (a joint venture between NOVATEK and PAO Sovcomflot) in September 2020 for 14 Arc7 ice-class LNG tankers, which will be built at the Zvezda Shipbuilding Complex.

The contracts for chartering, financing and construction of a pilot ice-class LNG tanker to be built at the Zvezda shipyard were signed in October 2019. Earlier, the participants of Arctic LNG 2 (NOVATEK, TOTAL, CNPC, CNOOC and the consortium of Mitsui and JOGMEC), in accordance with the Projects’ Sea Transportation Strategy, approved the construction of 15 Arc7 ice-class LNG tankers at the Zvezda Shipbuilding Complex.

A charter agreement was signed between MOL, a subsidiary of Mitsui O.S.K. Lines (MOL) and OOO Arctic LNG, for three ice-breaking LNG carriers for the project in February 2022. The contract followed the charter signed in October 2020. The vessels are planned to be constructed at Guangzhou Shipyard International, China, with the first delivery expected in 2024.

Technip Energies, an energy technology company, in a joint venture with Saipem and NIPIGAS, was contracted to provide engineering, procurement and construction services for the project. The first module was for LNG Train 1 was delivered in September 2021.

NIPIGAS, as the general design contractor of the project, performed FEED for the onshore infrastructure facilities by carrying out engineering surveys and developing the design documentation.

The charter agreement was signed with Smart LNG, a joint venture between NOVATEK and PAO Sovcomflot, a shipping company, for the construction of 15 LNG tankers at the Zvezda Shipbuilding Complex in September 2020. The agreement was signed following a chartering, financing and construction contract signed in October 2019.

Energy technology company Siemens was contracted to deliver three feed gas compressor units and six boil-off gas compressor units for the project in February 2019.

The contract for the design and construction of the GBS platforms was awarded to SAREN, a joint venture of Renaissance Heavy Industries Russia and Saipem in December 2018. SAREN subcontracted Gaztransport & Technigaz, an engineering company, for providing detailed designing and construction services for three GBS platforms in September 2019.

The contract agreement with SAREN included management, design, supply of materials and equipment, construction of three GBS structures for the three LNG trains at the NOVATEK-Murmansk centre and towing and installation of the GBS structures.

Italian company Nuovo Pignone, which is part of Baker Hughes (BHGE), a GE company, was contracted to supply gas turbine compressors and gas turbine generators for the three liquefaction trains. BHGE selected Flenco, an engineering company, to supply auxiliary systems for the project.