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Russian LNG giant seeks Japanese partnership in Arctic project

TOKYO -- Russian natural gas giant Novatek expects Japan Inc. to lend a hand in its Arctic Circle liquefied natural gas business, CEO Leonid Mikhelson said Thursday in an interview with The Nikkei.

Novatek's LNG business is expected to be a core part of the eight-point economic cooperation plan between Japan and Russia.

Novatek is planning a new large-scale project known as Arctic LNG 2, which targets annual production of 12 million to 16 million tons of LNG, with operations aimed to start by 2025. Mikhelson expressed a desire to see Japan be a cooperative partner at every step of the plan, from gas production to liquefaction plant construction and management, all the way to sales. It was also made clear that should Japanese enterprises cooperate, the country could expect a portion of the output.

The participation of Japanese enterprises in the gas project would go a long way toward fulfilling the energy portion of the eight-point cooperation plan, Mikhelson said. The Japan Bank for International Cooperation, or JBIC, is considering a jointly financed loan with European financial institutions, totaling 1 billion euros ($1.05 billion), to a current Novatek Arctic project called Yamal LNG. Mikhelson believes that the best way forward, and a doable goal, would be for the loan to be definitively agreed upon in time for Russian President Vladimir Putin's visit to Japan Dec. 15-16.

Japan and Russia have agreed to prioritize implementing roughly 30 areas of economic cooperation by Putin's visit. Mikhelson's statements hinted at the possibility that LNG projects involving Novatek could well figure into these 30 priorities.

(Nikkei)

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