By Anthony O. Goriainoff

Russia's Novatek said Friday that 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 Russian energy 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 announced separately that it had reached a preliminary agreement with PJSC Sberbank to cooperate in the ESG field. The company said both parties confirmed their intention to secure green financing for environmental protection and climate change mitigation projects, 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," the company said.

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

(END) Dow Jones Newswires

06-04-21 0531ET