German engineering giant Siemens is planning to produce compressors for the Arctic LNG 2 project near St. Petersburg. It will be a joint venture with Russia’s state-run firm Power Machines.

The compression machinery produced by Power Machines and Siemens will be supplied to the Arctic LNG 2 project developed by Russia’s biggest privately owned natural gas producer Novatek, according to the president of Siemens in Russia Alexander Liberov.

“We have recently signed a contract for delivery of compression equipment to Novatek for its Arctic LNG 2 project,” Liberov said in an interview with TASS.

“It’s important that we won’t just supply the project with the necessary machinery, but we are going to localize its production at our factory in the Leningrad region. That’s not just export of equipment, but localizing of engineering solutions for the energy sector.”

Siemens and Novatek sealed the deal on compressor equipment for three liquefaction trains earlier this month. The agreement reportedly moved Novatek’s Arctic LNG 2 project closer to the final investment decision planned for the middle of this year.

Arctic LNG 2 is Novatek’s second plant for liquefying gas in the Arctic region after Yamal LNG. The company is planning to launch operations at Arctic LNG 2 at the end of 2022.

The plant is expected to produce 19.8 million tons of LNG per year when at full capacity. The project is estimated to cost around $22 billion.

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