By Adria Calatayud

Novatek said Wednesday that it has signed a heads of agreement with China's Zhejiang Energy Gas Group Co., a subsidiary of Zhejiang Provincial Energy Group, for the supply of liquefied natural gas for a term of 15 years.

The Russian energy company said the agreement establishes key commercial terms for the annual supply of up to one million metric tons of liquefied natural gas from the Arctic LNG 2 project. The liquefied natural gas will be delivered to Zhejiang Energy's terminals in China, including feedstock for the buyer's new gas-fired power generation facilities, Novatek said.

The deal builds on a memorandum of understanding signed by the parties in October 2019, Novatek said.

Novatek, which holds a 60% interest in the Arctic LNG 2 project, said it plans to further increase its supplies of liquefied natural gas to assist China in reaching its net zero targets by 2060.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

06-02-21 0529ET