Total buys stake in Murmansk LNG terminal in Arctic Russia

The headquarters of Total, in La Defense business district, near Paris. (Martin Bureau/AFP/Getty Images)
The headquarters of Total, in La Defense business district, near Paris. (Martin Bureau/AFP/Getty Images)

The French company acquires 10 percent of Arkticheskaya Perevalka, the subsidiary company of Novatek that will operate a natural gas reloading facility on the Barents Sea coast.

Novatek now confirms that Total is buying 10 percent of the company that will operate the terminal in the Murmansk region. Arkticheskaya Perevalka will also operate a similar facility in Kamchatka on Russia’s Pacific coast.

The terminals will be floating facilities that can hold up to 360,000 tons of LNG each and simultaneously serve two LNG tankers. When ready, ice-class carriers will shuttle between the terminals and LNG plants in the Yamal and Gydan Peninsulas.

The new logistical scheme will cut costs and provide efficient transportation of liquified natural gas from the Arctic LNG 2, as well as other projects in the Arctic, Novatek informs.

The terminals will have a capacity to handle about 20 million tons per year and are due to be ready for operations in 2023.

Further interest in LNG

Total has long been in talks with Novatek about a stake in the reloading terminals. Novatek leader Leonid Mikhelson in early 2019 made clear that the Frenchmen were “interested in the operatorship of the terminal.”

«Actually we do not need partners up there [in Ura Bay], but we will still definitely hire an operator,» Mikhelson told news agency RIA Novosti during the World Economic Forum in Davos.

«Perhaps, Total, which is our permanent partner, after all they want it [and] if their interest persists, then we will consent in order to let the company be part of the process and have a transparent circuit.»

According to Mikhelson, several more companies have interested in the two planned LNG terminals, the one in the Kola Peninsula and the one in Kamchatka, far east Russia.

The terminal will be built by Korean yard Daewoo Shipbuilding & Marine Engineering (DSME), that in October 2020 signed a $748.2 million contract with the Russian State Transport Leasing Company. According to the deal, the terminal barges will be owned by the State Transport Leasing Company, but operated by Arkticheskaya Perevalka.

Tricky site

The development of the terminal in Ura Guba is considered highly tricky as the projected site is located only few kilometers from closed military town Vidyaevo and a local Northern Fleet submarine base. The project was discussed in a high-level meeting with participation of government ministers, military leaders and company chiefs in August 2018.

The local Navy base today houses several nuclear-powered submarines, including Sierra-II and Victor-III vessels.

Vidyaevo is located about 50 km to the northwest of Murmansk, not far from the border to Norway. It has a deep and year-round ice-free fjord, and is considered among the most favorable spots for shipping and logistics on the Kola Peninsula.

Related stories from around the North: 

Canada: Mining companies in Nunavut, Canada defend environmental management despite stiff criticism, CBC News

Norway: LNG plant in Arctic Norway pushes restart date to March 2022, The Independent Barents Observer

Russia: Arctic in spotlight as Moscow pushes for global lead in LNG, The Independent Barents Observer

Sweden: Green hydrogen plant doing steel production to be built in northern Sweden, The Independent Barents Observer

United States: U.S. court halts drilling at ConocoPhillips project in Alaska, The Associated Press

Atle Staalesen, The Independent Barents Observer

For more news from the Barents region visit The Independent Barents Observer.

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