Russian gas producer Novatek has signed agreements with the Chinese National Petroleum Company and China Development Bank for cooperation on the company’s second LNG project in the Arctic.

The two state-owned Chinese companies participated in Novatek’s first “Arctic LNG-1″ project in the Yamal peninsula after US and EU sanctions forced the $27bn initiative to turn to China for funding and support.

France’s Total also has a 20 per cent stake in the LNG-1 project, which began operations this autumn and will supply gas to Asia and Europe.

Novatek’s chairman Leonid Mikhelson said:

Our companies already have a history of effective cooperation, including the successful implementation of the Yamal LNG project. We believe our strategic cooperation agreement will further enhance our mutual relationship as well as open up new opportunities for both companies, utilizing our experience in implementing LNG projects combined with the enormous opportunities in the Chinese market, one of the most perspective gas markets globally.

Mr Mikhelson has previously said that an unnamed Saudi company is also in talks to participate in the project, and that partners in LNG-1 would be offered to continue their participation. Total has said it would be interested in taking part in LNG-2.

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