Save for later Print Download Share LinkedIn Twitter TotalEnergies on Thursday signed a memorandum on decarbonization, hydrogen and renewables with Russia’s Novatek, which it partners with in ambitious LNG expansion projects in the Arctic. Royal Dutch Shell also signed decarbonization deals with Russian partners in St. Petersburg, as international majors stick to Russian oil and gas but admit the sector must be decarbonized. Under the memorandum of understanding (MOU), TotalEnergies and Novatek plan to cooperate on reducing greenhouse gas emissions at joint projects by implementing carbon capture and storage (CCS) technologies and utilizing renewable energy sources, Novatek said in a statement. Further expanding their long-term partnership, Total also signed a sales and purchase agreement to acquire 10% in Novatek’s Arctic Transshipment subsidiary designed to operate the proposed LNG transshipment terminals in Murmansk and Kamchatka (LNGI Apr.28'21). Both deals were signed on the sidelines of the St. Petersburg International Economic Forum. Total has 19.4% in Novatek, 20% in Novatek’s flagship Yamal LNG project in the Arctic and 10% in the Arctic LNG 2 plant, scheduled for commercial launch in 2023. Russia Remains at the Center of TotalEnergies Strategy Despite changing its name last week and focusing more on renewables, TotalEnergies believes Russia is still at the center of the company’s strategy, CEO Patrick Pouyanne told the forum. Total doesn’t plan to scale down its LNG presence in Russia, he said. Russian-produced gas is a good instrument of energy transition, Pouyanne said. It helps produce electricity with lower CO2 emissions, if we talk about Vietnam, China or Korea, he said. The energy transition is a matter for all the world, not only the Western countries, and interests of developing countries should also be taken into account, for which gas is an important resource to ensure a decent standard of living, Pouyanne said. Gas Needs to Be Decarbonized But Russian gas needs to be decarbonized, he said. To do so, TotalEnergies is considering investing in CCS, ammonia, hydrogen and wind power in the Arctic, according to Pouyanne. “We think that we could produce wind energies in order to bring some renewable power, wind power to the [LNG] plant, so it’s a way to save some CO2,” Pouyanne told reporters. “The future of LNG is low-carbon energy.” he said. Total is discussing a wind power project on the Yamal Peninsula with Novatek and may take a final decision “in coming years,” Pouyanne said. Novatek to Decarbonize Vysotsk LNG Novatek also signed an MOU with power generation company Fortum, on cooperation in renewables, at the forum. Under the MOU, Novatek will purchase “green” electricity for its medium-sized Cryogas Vysotsk, or Vysotsk LNG, plant in northwestern Russia (LNGI Feb.19'21). Fortum owns the largest wind and solar portfolio in Russia -- more than 2 GW. The deal will help Novatek “offer its LNG customers a more sustainable product with a reduced Scope 2 carbon footprint (purchased electricity),” the LNG producer said. Shell Signs Decarbonization Deals in Russia At the same forum, Royal Dutch Shell also signed a decarbonization MOU with Fortum, under which the two companies plan to cooperate in renewable energy, carbon capture, and other climate projects in Russia aiming to reduce greenhouse gas emissions. Shell will consider using Fortum’s renewable energy to supply its operations in Russia. Shell signed a separate MOU with Gazprom Neft, the oil arm of state-run natural gas giant Gazprom, to cooperate in decarbonization. The two will look into the possibility of deploying carbon capture, utilization and storage solutions at their upstream joint ventures in Russia, Gazprom Neft said. They will also consider production of hydrogen via steam reforming of natural gas coupled with carbon capture, which is widely referred to as “blue” hydrogen. Total Discusses LNG Trading with Gazprom Pouyanne also discussed cooperation in LNG trading with Gazprom’s CEO Alexei Miller on the sidelines of the forum, Gazprom said without disclosing details. Gazprom did not say whether it would like to buy Arctic LNG 2 volumes from Total’s portfolio. Under the equity-offtake model, Total will bring some 1.98 million tons/yr, or 10% of Arctic LNG 2 output, into its portfolio. Gazprom already buys 2.9 million tons/yr from Novatek’s portion of Yamal LNG offtake. Elena Burmistrova, its Deputy CEO in charge of exports, said recently that the company was not in talks about Arctic LNG 2 volumes with Novatek. The latter will offtake 60%, or some 11.88 million tons/yr from Arctic LNG 2 and has already inked deals to resell part of those volumes (LNGI Jun.2'21). Vitaly Sokolov, St. Petersburg
