--Novatek Reaches financing agreements with Gazprombank and PJSC Sberbank for a gas chemical plant in Siberia

--Novatek will collaborate with PJSC Sberbank in the ESG field

--The Russian energy company will cooperate with PAO Severstal to reduce greenhouse gas emissions

By Anthony O. Goriainoff

Russia's Novatek said Friday that it has reached several preliminary agreements at St. Petersburg's International Economic Forum which will see the energy company engaging in greenhouse emissions reduction projects and cooperating in the ESG field.

The Russian energy company said it has reached a preliminary agreement with Gazprombank and PJSC Sberbank to finance the construction of a gas chemical plant on Siberia's Yamal peninsula.

The company said the plant, which will be close to the town of Sabetta, will produce low-carbon ammonia, hydrogen, and other greenhouse gas emissions-reducing chemical products.

"We plan to capture the carbon dioxide emitted from the ammonia production by injecting the CO2 into underground reservoirs to ensure the supply of clean energy to Europe and the Asia-Pacific region," the company said.

Novatek also said that it has reached a preliminary agreement with PJSC Sberbank to cooperate in the ESG field which will see both parties working to secure green financing for environmental protection and climate change mitigation projects. The companies will also work on renewable energy development, the production and transshipment of low-carbon or carbon-neutral products, as well as joint social initiatives.

"This new memorandum of understanding takes our mutual cooperation to another level and accords us the additional opportunities to implement Novatek's social and environmental initiatives, which represent one of the core elements of decarbonizing our hydrocarbon value chain and meeting the company's development strategy," Novatek said.

The natural-gas producer said it will cooperate with PAO Severstal in the alternative and hydrogen energy field to reduce greenhouse emissions.

The company said the memorandum of understanding will provide for the implementation of a joint pilot project which will use technologies used for carbon capture and storage to produce "blue" hydrogen from natural gas. Furthermore, both parties will cooperate to produce and supply hydrogen and develop technological solutions for the use of fuel types based on hydrogen and its carriers, ammonia in particular.

"Blue" hydrogen is derived from natural gas and is considered to be cleaner than other current industrial processes. However it isn't a zero-emissions or "green" hydrogen, which is made using renewable power and electrolyzers.

"The use of carbon capture and storage technologies, as well as a hydrogen fuel blend will reduce our joint carbon footprint and increase the competitiveness of products manufactured by the Russian steel industry," the company said.

Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com

(END) Dow Jones Newswires

06-04-21 0644ET