SINGAPORE - Temasek-backed Pavilion Energy is mulling over its participation in the US$25.5 billion (S$35.3 billion) liquefied natural gas (LNG) project dubbed Arctic LNG 2, to be developed by Russia's largest independent gas producer, Novatek.

This is one potential area for collaboration outlined in a memorandum of understanding (MOU) signed on Tuesday (Nov 13) by the chairman of Novatek's board and Russia's second-richest man, Mr Leonid Viktorovich Mikhelson, and Pavilion Energy's group CEO Frédéric Barnaud.

The MOU, signed on the sidelines of Russian President Vladimir Putin's state visit to Singapore, called on the Temasek-backed LNG player to evaluate participation in Novatek's Arctic LNG 2 project, which ranks among the biggest LNG export projects in the world.

The partners will also look at collaboration in LNG supply, trading and optimisation. They will review joint investments and capacity leasing arrangements for LNG carriers, storage, reload and transshipment facilities.

The MOU signing signals the intent of the two parties to deepen their LNG ties after their first transaction.

The Business Times understands that Pavilion Energy has already taken in a cargo from Novatek's Yamal LNG project that was shipped via Russia's North Sea Route. Novatek has beaten expectations to complete the first Yamal trains on time and within budget. It has since moved on to pursue its second major project in Russia's LNG space. Its Arctic LNG 2 project involves the construction of three LNG trains, each with 6.6 million tonnes per annum of capacity.