Russia's Novatek signed a non-binding heads of agreement with Spain's Repsol for the supply of LNG, the company announced on Wednesday.
Novatek said the agreement envisages concluding a 15-year contract for the annual supply of one million tons of LNG from the Arctic LNG 2 project as well as from other projects of the company.
The LNG will be delivered ex-ship primarily to markets on the Iberian Peninsula.
"The agreement for the sale of LNG would allow us to increase our market presence on the Iberian Peninsula where Russian pipeline gas is not supplied," noted Novatek's First Deputy Chairman Lev Feodosyev.
"Expanding our supply geography and diversifying our long-term contract customer base is consistent with the company's strategy to ramp up LNG production in the Russian Arctic," he said.
With a production capacity of 19.8 million tonnes per year, or 535,000 barrels of oil equivalent per day (boe/d), the Arctic LNG 2 project will develop over 7 billion boe of resources in the Utrenneye onshore gas and condensate field.
The project will involve the installation of three gravity-based structures in the Gulf of Ob on which three liquefaction trains of 6.6 million tonnes per year each will be installed.
Arctic LNG 2 production will be delivered to international markets by a fleet of ice-class LNG carriers that will be able to use the Northern Sea Route and a transshipment terminal in Kamchatka for cargoes destined for Asia and one close to Murmansk for cargoes destined for Europe.
By Murat Temizer