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China National Offshore Oil Company, or CNOOC, announced it has signed a deal worth $1.6 billion to build equipment for the Yamal LNG project in Siberia. The project is currently scheduled to begin in 2017 and annual capacity per LNG train is expected to be 5.5 million tons – all of which has already been signed to contracts.

Source: Total SA

Source: Total SA

The Yamal LNG project is a $27 billion joint venture between China’s National Petroleum Company (CNPC) and Russia’s Novatek, the largest and second-largest energy companies in each respective country.Novatek holds a 60% stake, while CNPC and France’s Total SA (ticker: TOT) each hold a 20% stake. According to Total’s web site, three LNG trains are planned for construction and will bring total capacity to 16.5 million tons. The site also says the region is ice bound nine months of the year, and the project will introduce the industry’s first icebreaker tankers to allow transport. Nine ice-class vessels are currently under construction and are priced at $300 million apiece. The vessels will be designed to break through ice up to six feet in thickness.

Click here for videos and more information on the Yamal LNG project.

CNPC and Gazprom, Russia’s largest oil company, signed a 30 year, $400 billion deal for natural gas in May 2014. Gazprom says it is currently considering building an LNG plant in the Yamal region and has development licenses throughout the area. Total reserves are estimated at nearly 40 trillion cubic meters of gas.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.