SHENERGY Group recently signed a sales and purchase agreement with Russia’s second-largest gas producer Novatek to receive more than 3 million metric tons of liquefied natural gas over a 15-year period.

The LNG will be sourced from Arctic LNG 2, a new project in Russia, and will come online around mid-2023 at the earliest.

Analysts said this will help the Shanghai-based company to ensure its energy needs. It is also in accordance with a growing trend for Shanghai to diversify its LNG supply mix.

“Russia’s Novatek has entered Petronas’ Shanghai LNG turf, adding to a growing trend of Shanghai diversifying its LNG supply mix, where currently about 80 percent comes from Petroliam Nasional Berhad (Petronas)’s Malaysia complex,” said Cao Lujia, an analyst at BloombergNEF.

Petronas has a long-standing relationship with Shenergy and delivers 3 million tons of LNG a year to Yangshan, Shanghai. The two companies also signed a deal last year to send 1.5 million tons of LNG a year to the Wuhaogou terminal starting in 2022.

The Yangshan and Wuhaogou terminals supply over 50 percent of the total gas consumed in Shanghai. (China Daily)