Russia-based natural gas producer Pao Novatek’s board of directors has agreed to establish a transportation subsidiary called Maritime Arctic Transport.

The subsidiary will be formed to manage and optimise transportation costs, build up Arctic navigation capabilities, as well as ensure centralised management of the company’s Arctic fleet.

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The company is yet to disclose further details about Maritime Arctic Transport.

Novatek management board chairman Leonid Mikhelson said: “Novatek’s long-term development strategy envisages a significant growth in LNG production from the company’s vast hydrocarbon resource base located on the Yamal and Gydan peninsulas in the Arctic zone of more than 55 million tons per annum by 2030.

“Therefore, establishing an efficient Northern Sea Route shipping model is one of our key priorities to realise our long-term strategy.

“Establishing an efficient Northern Sea Route shipping model is one of our key priorities to realise our long-term strategy.”

“Creating our own shipping company fully supports this goal and will optimise transport cost and ensure a well-balanced, centralised management structure to improve the competitiveness of Novatek’s Arctic projects.”

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In March, Novatek and Cosco Shipping agreed to expand the mutual cooperation of the frontiers of Arctic shipping.

The companies took the decision during a meeting held in Shanghai, China.

Novatek was established in 1994 and is involved in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons.

The company’s upstream activities are primarily based in the Yamal-Nenets Autonomous Region, which is the world’s largest natural gas producing area and represents around 80% of Russia’s natural gas production and nearly 16% of the world’s gas production.