Chinese investment in Russia's new Arctic LNG 2 project is viewed as vital by Deutsche Bank (DB) due to potential financing problems caused by western sanctions.
China's CNOOC and CNPC each agreed to take a 10% stake in the Novatek-led scheme on Thursday, with France's Total already having bought 10%.
DB analyst Chris Snyder said: "Bringing in strong partners is paramount for Arctic LNG 2, as it could prove difficult for the project to receive traditional bank financing given US/EU sanctions."
The transaction marks CNOOC's first direct entry into Russia as China looks to bring fresh LNG supply to the market to meet aggressive coal to gas switching targets, he added.
"Following the success of Yamal LNG, Novatek has built significant momentum for the Arctic LNG 2 project," Snyder said.
"Much of this interest has come from international NOCs, most notably Saudi Aramco, as big oil looks to increase LNG exposure where demand is growing 10%-plus annually while oil markets near peak demand."
The new investment in the project supports DB's forecast of a 2020 final investment decision (FID).
Biggest FID for 40 years
With an annual capacity of 19.8m tons per year, Arctic LNG 2 would be the largest project to reach a FID since the 1970s, DB said.
"This supports our call of a mega-train revival , as lowered off-take thresholds reduce the marketing burden that has historically prevented these ultra-large LNG projects (15+ Mtpa) from reaching FID," it added.
Novatek has said it will sell 50% of the project’s capacity in the spot market versus just 4% for its last large project, Yamal.
