Russia's Novatek ships first LNG cargo to Japan eastbound via Northern Sea Route

London — Russian LNG producer Novatek said July 24 it had shipped its first cargo from the Yamal LNG project to Japan eastbound via the Northern Sea Route, giving the company scope to increase LNG exports to Japan.

The NSR is closed to eastbound shipping for around half the year due to ice, but cargoes can be shipped eastward during the summer and autumn, significantly reducing the time it takes for LNG cargoes from Yamal LNG to reach northeast Asian markets.

This year, the NSR was opened up much earlier than in previous years, with the first cargo sent to China on May 18, more than a month earlier than the first shipment in 2019.

The first ever cargo delivered via the eastbound NSR to Japan was delivered aboard the Vladimir Rusanov under a spot contract and unloaded at the Ohgishima LNG Terminal, Novatek said.

"This LNG cargo is the company's first successful experience of entering and unloading an Arc-7 ice-class LNG tanker in a Japanese port, which allows the company to increase the volume of LNG supplies to this country," Novatek said in a statement.

Novatek First Deputy Chairman Lev Feodosyev said the company was focusing "a significant amount of attention" on developing and enhancing its LNG export logistics.

The company is developing a transshipment terminal in Kamchatka to enable LNG to be unloaded from the specialized ice-class tanker fleet onto traditional LNG vessels.

This, Feodosyev said, would "significantly expand our opportunities to cost competitively deliver and supply LNG to the entire Asia-Pacific region."

Yamal plant

The NSR is normally open until around mid-November, meaning that there are limits on how many cargoes can reach Asia via the route.

Around 15 Arc7 ice-class specialist tankers are in operation shuttling back and forth from the Yamal LNG plant.

Novatek launched the 16.5 million mt a year (22.8 Bcm/year) capacity Yamal LNG plant in December 2017 and last year shipped 24.7 Bcm of gas equivalent, more than its nameplate capacity, as all three trains were available for the first time.

The first cargo from Yamal LNG to be shipped eastward via the NSR was aboard the Vladimir Rusanov on June 25, 2018.

The shareholders in Yamal LNG are Novatek with an operating 50.1% stake, France's Total (20%), and China's CNPC (20%) and Silk Road Fund (9.9%).

Novatek is also developing a second major LNG terminal in the region, the 19.8 million mt/year Arctic LNG 2 project, which has Japanese shareholders.

A consortium of Mitsui and Jogmec -- called Japan Arctic LNG -- has a 10% stake in the project, which is expected to start up in 2023.

Novatek has a 60% stake in Arctic LNG 2, with the remaining shareholders comprising Total (10%), CNPC (10%) and China's CNOOC (10%).