Moscow, Riyadh mull Aramco stake in Novatek’s LNG project

Russian news agency RIA reported Monday Russia and Saudi Arabia have agreed to evaluate the potential acquisition of a stake by Saudi state-owned energy firm Saudi Aramco in Novatek’s Arctic LNG 2 project.

The companies have longed been rumored to be negotiating participation in the gas liquefaction project in northern West Siberia. The second large-scale plant is slated to enter operation in the early 2020s, with Italy’s Saipem to carry out construction, Kallanish Energy notes.

In October, Saudi Aramco CEO Amin Nasser said the company was discussing several investment opportunities with Russian companies, but declined to announce specific plans to acquire a stake in Novatek’s project.

The CEO signed five memoranda of understanding (MoUs) with Russian energy companies in Moscow then, targeting a “significant energy synergy.” The deals included investment in energy services and manufacturing, petrochemical, trading and gas collaboration. Russian state-owned gas company Gazprom signed two agreements with Aramco.

Earlier this month, Novatek gained Chinese support for the implementation of the Arctic LNG 2 project, through deals with the China Development Bank and Chinese state-owned oil firm CNPC.

Both entities have already been involved in Novatek-led project Yamal LNG, providing financing and as an equity partner, respectively.