Nov. 1 (UPI) -- Russian independent gas producer Novatek said Wednesday it reached an agreement with a Chinese bank to help implement a Arctic liquefied natural gas project.
Novatek said it signed a memorandum of understanding with the China Development Bank to cooperate on steering capital toward LNG.
"Our strategy envisages a rapid growth of LNG production using international financing sources," Leonid Mikhelson, the chairman of the Novatek board, said in a statement. "We already have a positive experience of cooperating with the China Development Bank on the Yamal LNG project, and we are glad to continue this mutually beneficial cooperation on our new LNG projects."
Novatek, the largest private natural gas company in Russia, leads the project aimed at sourcing the markets in the Asia-Pacific, alongside French energy company Total and the China National Petroleum Corp.
The Yamal LNG project has the capacity to produce about 16.5 million tons of natural gas and exports could target consumers in the Far East. The understanding with the Chinese bank envisions support for a second LNG development in the Arctic.
Separately, Novatek said it signed a strategic cooperation agreement with CNPC, its partner at Yamal, that outlines implementation of a second Arctic LNG project, including the development of infrastructure and trading mechanisms.
"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," Mikhelson said.
Russian President Vladimir Putin talked up the growing energy partnership with China during a summer visit to Beijing. China is already linked to Russian oil supplies through the East Siberia-Pacific Ocean pipeline and Putin's visit followed reports that China may be a potential investor in Russian oil company Rosneft, on the table as a possible target of a privatization scheme meant to help pull Russia's energy-based economy out of recession.