Russian Arctic LNG 2 project production cease is likely inevitable as its upstream natural gas output from the Utrenneye field crashed by more than 350% to the extent that it only keeps the project utility units operational.
Russian Arctic LNG 2 project’s production cease is likely inevitable as its upstream natural gas output from the Utrenneye field crashed by more than 350% to the extent that it only keeps the project’s utility units operational.
The US-blacklisted project started LNG production in December; however it has failed to begin LNG exports due to the lack of ice-class LNG carrier(s) essential to ship the cargoes from the Arctic-based project while its LNG storage tanks are near full.
In January, Russian Deputy PM Alexander Novak had said that the first shipment would happen in February but the Novatek-operated project has not yet received the specialised ship from South Korea’s Hanwha Ocean to be enable for starting LNG export.
The US government imposed some critical and extensive sanctions on Arctic LNG 2 which would affect the project’s developers, off-takers and shippers.
The Russian operator has already sent force majeure notifications for its Arctic LNG 2 project’s buyers, informing them over further delay in LNG supplies from the project.
Sanctions have led to the withdrawal of the project’s main EPC contractor which is TechnipEnergies-Saipem-Renaissance JV as well as several other international subcontractors.
The project’s first train was expected to start production in the first quarter of 2024. “However, the completion of the second and third trains in 2024 and 2026, respectively, is more complicated now though key liquefaction equipment is already located in Russia.”
The 19.8 MMT/Y Arctic LNG 2 project’s term LNG buyers are TotalEnergies, CNOOC, CNPC, Japan Arctic LNG, Shenergy, Zhejiang Energy and ENN, according to the
LNG Contracts Database.
Earlier, Mosi Nabi, Director of Consulting Services at Global LNG Info, had said that the US government’s sanctions on the Arctic LNG 2 project are challenging Chinese companies’ plans to supply Russian LNG to their domestic market and re-export bought US LNG to the other Asian and European markets, aiming to gain higher profit by selling LNG cargoes in the spot market in winter.
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