Mitsui O.S.K. Lines, Ltd. (MOL; President and CEO: Junichiro Ikeda), announced that charter agreements were signed for three icebreaking liquefied natural gas (LNG) carriers with LLC ARCTIC LNG 2, the largest shareholder of which is PAO NOVATEK (Head Office: Moscow, Russia), through a wholly owned subsidiary of MOL on October 28. The three vessels will be built by Daewoo Shipbuilding & Marine Engineering Co., Ltd (Head Office: Geoje, Korea) and are scheduled for delivery in 2023.

The vessels will mainly transport LNG from an LNG loading terminal on the Gydan Peninsula in the Russian Arctic to the floating LNG storage units (FSU) to be installed at the transshipment terminal in Kamchatka (eastbound) and Murmansk (westbound) via the Northern Sea route. Compared with MOL's previous icebreaking LNG carriers, which can only sail eastbound in the Northern Sea Route during mostly summer and autumn period of time when the ice is thin, the new vessels will have a narrower width, hull form optimized for ice breaking, and an increased propulsion engine output which will enable the vessels to sail east via the Northern Sea Route all year round.

The combination of these ice-breaking LNG vessels, which can transport LNG to the FSUs in the east and west throughout the year, and conventional LNG carriers that will transport LNG from the FSUs to their final destinations, will enable efficient year-round transportation of LNG from the Russian Arctic to areas of demand, including those in Asia. The eastbound transportation route will reduce the distance of the voyage by approximately 65% compared to the westbound route via the Suez Canal for Asian destinations, thereby making a significant contribution to a reduction of greenhouse gas emissions by vessels.

MOL has been engaged in transporting LNG using three icebreaking LNG carriers on the Northern Sea Route since March 2018 for the Yamal LNG Project in Russia. These new contracts were concluded in recognition of MOL's proven track record and technical expertise in the Northern trade, and the experience and resources which the company has built over many years of LNG transportation. These agreements are in line with the direction MOL declare in the Management Plan "Rolling Plan 2020", namely to strategically allocate management resources in businesses where MOL is particularly strong.

MOL will continue to actively pursue the diversification of LNG transportation to help meet the world's growing energy demand, and contribute to the further development of the Northern Sea Route as a pioneering company in this field.

About Arctic LNG 2

Arctic LNG 2 envisages constructing three LNG liquefaction trains of 6.6 million tons per annum each, as well as cumulative gas condensate production capacity of 1.6 million tons per annum. The total LNG capacity of the three liquefaction trains will be 19.8 million tons. The Project utilizes an innovative construction concept using gravity-based structure (GBS) platforms to reduce overall capital cost and minimize the Project’s environmental footprint in the Arctic zone of Russia.

The Project’s participants include: NOVATEK (60%), TOTAL (10%), CNPC (10%), CNOOC (10%) and the consortium of Mitsui and JOGMEC (10%).

About Mitsui O.S.K. Lines, Ltd.

Mitsui O.S.K. Lines, Ltd. is a Japanese transport company headquartered in Tokyo, Japan. It is one of the largest shipping companies in the world, and the largest LNG Carrier Operator. Mitsui O.S.K. Lines fleet includes dry cargo ships, liquefied natural gas carriers, Ro-Ro Car Carrier ships, tankers, and also diversifies its business to maritime related industries.

About Novatek

PAO NOVATEK is the largest independent natural gas producer in Russia, and in 2017, entered the global LNG market by successfully launching the Yamal LNG project. Founded in 1994, the Company is engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons. Upstream activities of the Company’s subsidiaries and joint ventures are concentrated mainly in the prolific Yamal-Nenets Autonomous Region, which is the world’s largest natural gas producing area and accounts for approximately 80% of Russia’s natural gas production and approximately 15% of the world’s gas production. NOVATEK is a public joint stock company established under the laws of the Russian Federation. The Company’s shares are listed in Russia on Moscow Exchange (MOEX) and the London Stock Exchange (LSE) under the ticker symbol «NVTK».