Second phase of Russia-China LNG project gets underway

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01:15

The Yamal liquefied natural gas (LNG) project, a joint venture between China and Russia, launched its second production line on Thursday, six months ahead of its initial schedule.

Novatek－Russia's largest independent natural gas producer－owns 50.1 percent of the project, while French energy giant Total accounts for 20 percent. China National Petroleum Corporation (CNPC) has a 20-percent stake, and China's Silk Road Fund owns 9.9 percent.

Novatek CEO Leonid Mikhelson was present at a launch ceremony at the company's plant in Sabetta on the Yamal Peninsula, in northwest Siberia.

"We are very satisfied with our partners and are carrying out concrete negotiations about the next project that will be joined by the CNPC. We welcome Chinese enterprises to join our projects, as we have become great cooperative partners, and I hope that such cooperation will continue," said Mikhelson.

Leonid Mikhelson, CEO of Novatek PJSC, attends a ceremony to mark the official opening of the second production line of the Yamal LNG plant in Sabetta, Russia, August 9, 2018./VCG Photo

The LNG project will consist of three production lines, each with a capacity of 5.5 million tons per year. The first production line entered operation in December 2017, and the third one is expected to be commissioned in 2019.

The first batch of 170,000 cubic meters of LNG from the Yamal project's second production line was later loaded onto a ship at the Port of Sabetta, bringing the project's total LNG shipments to over 3.5 million tons.

The Yamal LNG project is the first mega-energy cooperation project between China and Russia after China proposed the Belt and Road Initiative in 2013.

The initiative refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road, which aims at building a trade and infrastructure network connecting Asia with Europe and Africa along the ancient trade routes of the Silk Road.

The first batch of LNG bound for China from the Yamal project's first production line was delivered to east China's Jiangsu Province on July 19.

According to an industry report, China is likely to become the world's largest natural gas importer by 2019 in terms of domestic short supply, with imports expected to reach 171 billion cubic meters by 2023. The majority of those imports will consist of LNG.

Russia's share in the global LNG market will rise from four percent to more than eight percent by the time the Yamal project is complete. As agreed, at least 4,000,000 tons of LNG will be shipped to China every year.