LNG in World Markets: Sanctions Continue to Target Russia’s Export Projects

This current feature was extracted from the latest edition of Poten’s LNG in World Markets, a monthly service published on October 31, 2023.

The tightening of western sanctions in response to Russia’s invasion of Ukraine continues to target Russian liquefaction projects rather than operating LNG export facilities, with the most recent round of restrictive US measures taking aim at Novatek’s planned transshipment operations.

The measures follow prohibition of liquefaction equipment and services to Russia by the US, EU, UK and others, which forced Novatek to replace the EU and other western contractors working on the company’s 19.8-MMt/y Arctic LNG 2 project as they wound down their operations by May 27 last year. In addition to the transshipment operations, other companies included in the latest round of US sanctions include Russian companies JSC Energies, Nova Energies LLC., LLC. Arctic Energies, and Abu Dhabi’s Green Energy Solutions – all of which are providing engineering, technology and/or construction services to the Arctic LNG 2 project.

Despite the exit of western contractors, Novatek was able to get the first gravity-based structure (GBS) to be used for Train 1 of the $27.6-billion Arctic LNG 2 project out during the summer shipping window. This is key to its plan to start up Train 1 at the end of this year and reach design capacity in 1Q 2024. The GBS arrived on site at Utrenny in Ob Bay on Aug. 12 and commissioning work on Train 1 and construction of the Utrenny port ice barriers are ongoing. Novatek plans to start Train 2 by the end of 2024 and Train 3 by the end of 2026.

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