Russian companies Gazprom, which produces 12 percent of the global gas output, and Lukoil, which lifts 2 percent of the global crude production, are set to create a joint venture to extract natural gas from the Arctic.

Alexey Miller, chairman of the Gazprom Management Committee, and Lukoil President Vagit Alekperov, met to discuss the development of the "Vaneyvisskoye and Layavozhskoye fields in the Nenets Autonomous Area," Gazprom said Thursday.

"Preparations are underway for the establishment of a joint venture," Gazprom said.

The development project was initially agreed in May 2018 when a preliminary accord was signed for an equally owned joint-venture, Lukoil added.

The area is an autonomous region with an Arctic ecology that is the smallest of all Russian federal subjects by population. Oil- and gas-related activities already account for nearly all industrial activity in the area.

Gazprom won licenses for the two fields in June 2016 by offering to pay three times the minimum price, according to a report at the time.

The fields, which cost Gazprom over $350 million in rights, are estimated to contain, combined, about 15 million tonnes of oil and 225 billion cubic meters of natural gas, according to reports at the time quoting Russian ministry estimates.

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