Russia's Novatek has signed an agreement with State-owned China National Petroleum Corp (CNPC), logo pictured, on strategic cooperation. Photo: AFP

High North News is reporting that Russian natural gas giant Novatek will cooperate with the China National Petroleum Corporation (CNPC) and the China Development Bank in implementing its Arctic LNG 2 project on the Gydan Peninsula that juts into the Kara Sea.

Novatek is Russia’s biggest non-state LNG producer.

The tie-up reportedly follows an existing cooperation pact between Russia and China on Novatek’s Yamal LNG project at Sabetta in Russia’s far North.

In the latest instance, Novatek has inked a strategic agreement with CNPC to jointly develop the large-scale Arctic LNG 2 project. The partners will also collaborate in various segments of natural gas and liquefied natural gas markets, including the trading of LNG and gas infrastructure.

High North News says an additional memorandum of understanding was signed under which the China Development Bank will provide for up to US$3 billion in financing for the project. This will take place under a framework between Vnesheconombank and the Export-Import Bank of China.

Novatek is already closely involved with CNPC and China Development Bank as part of the Yamal project. CNPC holds a 20 percent stake in the Yamal, and Novatek received a US$12 billion loan from the China Development Bank. In addition, the Chinese Silk Road Fund holds a 9.9% stake.