Novatek brought the domestic Yamal LNG line to a capacity of about 1 million tons

“Novatek» achieved an increase in the capacity of the fourth line of the Yamal LNG plant for the production of liquefied natural gas (LNG) above its design capacity. This line operates on the domestic technology “Arctic Cascade”. Vladislav Khlybov, deputy director for production at Yamal LNG, told reporters that the line’s actual performance at sub-zero temperatures is 6% higher than its nominal capacity.

The design capacity of the fourth line of Yamal LNG is 950,000 tons per year. Thus, its actual productivity at the end of the year can be about 1 million tons.

Khlybov recalled that the three main production lines of the plant operate with a 20% excess of design capacity (the design capacity of each line is 5.5 million tons per year).

“We went to [объем производства] 120% of the design capacity (for three main technological lines. – Vedomosti), having received project documentation, all expertise. “Arctic Cascade” also allows [превосходить проектную мощность], but not with such an excess as the main lines work with. But it works from the nominal value above, 106% at sub-zero temperatures,” the top manager specified.

According to Khlybov, due to the increase in the productivity of all four lines, LNG production at the plant will reach a historical maximum by the end of 2022: “This year we plan to produce 21 million tons of LNG. This will be the maximum amount of LNG production that we have in five years [работы предприятия] achieve,” he said.

In 2021, the plant produced 19.64 million tons of LNG. Thus, in 2022, production can grow by about 7%. In 2023, Yamal LNG, according to a top manager, will slightly reduce production due to repair work on two of the three main production lines. “We didn’t have any major repairs this year,” he said.

Khlybov added that the existing problems with the Arctic Cascade technology “have been successfully resolved, the technology is ‘working’.” Earlier, the company reported that the technology could be used in the implementation of Novatek’s new project, the Ob LNG.

Now there are only two operating large-tonnage LNG projects in Russia – Yamal LNG and Sakhalin-2, which produced 10.4 million tons of liquefied gas in 2021. The shareholders of Yamal LNG are Novatek (50.1%), French Total (20%), Chinese CNPC (20%) and the Silk Road Fund (9.9%). Participants of “Sakhalin-2” – “Gazprom“(50%), Shell (27.5%, plans to withdraw from the project), Japanese Mitsui (12.5%) and Mitsubishi (10%).

All lines on these two projects, with the exception of the Arctic Cascade, are built on imported equipment. But with the introduction of domestic technology, Novatek had difficulties earlier. Initially, it was planned to launch the fourth line of Yamal LNG by the fourth quarter of 2019, but the initial deadlines were repeatedly shifted.

The suppliers of key equipment for the fourth line of the Yamal LNG were ZiO-Podolsk (part of theRosatom”), Kazankompressormash (HMS group) and Cryogenmash (OMZ group).

According to the Kommersant newspaper, the problems with the line’s operation were associated with a revision of the operating modes during technological shutdowns. It was originally planned that process gas would be vented from the system during shutdowns. But Novatek asked for redesigns to keep the gas inside, which necessitated the replacement of pipelines with ones more resistant to low temperatures.

Novatek explained this by introducing and testing its own gas liquefaction technology. What exactly the problems were, was not explained. As a result, the fourth line of Yamal LNG reached its full capacity of 950,000 tons per year only in May 2021.

The Ob LNG project initially provided for the creation of three production lines with a capacity of 1.6 million tons of LNG each based on the Arctic Cascade technology. The resource base of the project is the Verkhnetiuteyskoye and Zapadno-Seyakhinskoye fields in Yamal, as well as the Neytinskoye and Arkticheskoye fields.

In May 2019, Vladimir Khurtin, General Director of the enterprise, stated that Novatek expects to start LNG production at the first line of the plant in the fourth quarter of 2022. The second and third stages were supposed to be launched in the second and third quarters of 2023, respectively. But so far, the final investment decision has not even been made on the project. The company plans to accept it in the first half of 2023, Leonid Mikhelson, Chairman of the Board of Novatek, said earlier.

In February 2022, it became known that the project could be implemented on the basis of imported equipment used for Arctic LNG 2 (Novatek’s second LNG project), due to numerous problems with Russian equipment on the fourth line of Yamal LNG “. But in June, Mikhelson announced that the company had decided to start design work on two lines of the Ob LNG with a capacity of 2.5 million tons of LNG per year based on the Arctic Cascade technology.

In a single complex with the Ob LNG, it was planned to build a gas chemical complex with a capacity of 2.2 million tons of ammonia and 130,000 tons of hydrogen per year – the Ob GCC. The launch of the first line of the plant was scheduled for 2026, the second – for 2027.

Finam FG analyst Sergey Kaufman recalls that the launch of the fourth line of Yamal LNG was postponed several times, but even after the launch it was unstable. But in the face of tougher sanctions and problems with the supply of imported equipment, according to Kaufman, Novatek’s strategy has changed – the company seeks to “bring to the maximum perfection” its own LNG technology. “Most likely, Ob LNG will return to using domestic technology,” the analyst believes.

Sergei Grishunin, Managing Director of the NRA Rating Service, notes that the difficulties in launching the fourth line of Yamal LNG were due to a single-circuit cooling system instead of a traditional dual-circuit one, since the company relied on low temperatures in the Arctic. “It probably did not give a stable temperature regime for a long time. Now the problem is considered eliminated,” he says.

Kaufman notes that LNG production at Ob LNG, if the final investment decision is made, can be expected around 2026. The expert notes that Novatek has announced plans to build lines under the Arctic Cascade scheme with a capacity of up to 2.5 million tons per year. But now there is no ready-made solution for a line with such a capacity, says Igor Yushkov, an analyst with the National Energy Security Fund. Kaufman admits that, taking into account the course towards import substitution in Russia, the Arctic Cascade can be used in the next after the Ob LNG project of Novatek – Arctic LNG 1. “The technology is scalable, so it is suitable for larger facilities,” agrees Grishunin.