Novatek strikes LNG supply deal with Glencore and Zhejiang Energy Gas Group

London (Quantum Commodity Intelligence) - Russian gas producer Novatek has struck deals to supply Glencore and Zhejiang Provincial Energy Group with LNG in East Asia, the company said Wednesday. 

Novatek will supply up to 1 million mt a year of LNG to Zhejiang Energy Gas Group, a subsidiary of Zhejiang, at its LNG terminals in China, including to the buyer's new power generation facilities.

Glencore will take more than 500,000 mt of LNG a year, which will be delivered to a number of locations in East Asia, the trader said in a separate statement.

"This transaction is another building block in our LNG marketing business. LNG remains one of the key growth pillars of our strategy and we will continue to assess the exciting opportunities we see in the market," said Alex Sanna, Glencore CEO of Oil Marketing.

The LNG will come from Novatek's Arctic LNG 2 project, located on the Gydan Peninsula in the north of Russia along the Northern Sea Route. 

Novatek holds a 60% stake in the 19.8 million mt per year project, while TotalEnergies, CNPC, CNOOC and a Japanese consortium including Mitsui each hold 10%.