Arctic LNG 2 to start operations despite US sanctions

The project is central to Russia’s plan to increase liquified natural gas (LNG) production.

Novatek, Russia’s LNG producer, has begun operations at its Arctic LNG 2 project despite US sanctions.

According to Bloomberg, Russia’s Deputy Prime Minister, Alexander Novak, said in an interview with a state-run TV channel at the end of last year: “We are expecting the first shipments from this project in the first quarter of next year.”

The Arctic LNG project, located in Gydan in northern Russia, will produce around 19.8 million tonnes of LNG per annum, according to Offshore Technology‘sparent company, GlobalData. The estimated total investment required for this is $21.3bn (Rbs1.94trn).

In November the US imposed sanctions on Arctic LNG 2 in response to the continuance of the war in Ukraine, targeting Russia’s future energy capabilities. This derailed Novatek’s plans to begin production at the site in 2023.

Novatek owns 60% of the project, while TotalEnergies, China’s CNPC and CNOOC, and a consortium of Japanese trading house Mitsui & Co and Jogmec each hold a 10% stake.

South Korean shipbuilder Samsung Heavy Industries ceased production of blocks and equipment for ten out of the 15 Arctic LNG carriers and Mitsui & Co pulled its employees out of the project at the end of December.

Comments are closed, but trackbacks and pingbacks are open.