Skip to content
Edit post

Reuters: Sanctions may force Russian company to scale back Arctic LNG project

by Elsa Court and The Kyiv Independent news desk April 4, 2024 4:42 PM 2 min read
Novatek takes part in the 26th St. Petersburg International Economic Forum (SPIEF) in St. Petersburg, Russia on June 14, 2023. (Sefa Karacan/Anadolu Agency via Getty Images)
This audio is created with AI assistance

Support independent journalism in Ukraine. Join us in this fight.

Become a member Support us just once

Russian gas producer Novatek is considering scaling back a major liquefied natural gas (LNG) project due to the impact of Western sanctions, Reuters reported on April 4, citing sources in the industry.

Novatek is Russia's largest LNG producer and the country's second-largest natural gas producer.

The company has a 60% share in the Arctic LNG-2 project, a planned LNG extraction site in northern Siberia that intends to produce 19.8 million metric tons of LNG annually.

The US imposed sanctions on the Arctic LNG-2 project at the end of 2023, which prompted foreign shareholders to freeze participation and Novatek to issue force majeure declarations to multiple clients.

According to Reuters, sanctions also meant that Novatek could not purchase enough ice-class tankers needed for the project, leading the company to "focus instead on developing its project at the ice-free port of Murmansk."

The scaling back of the Arctic LNG-2 project may complicate Russia's aim to increase its share of the global LNG market from 8% to 20% by 2030, offsetting the economic impact of sanctions on Russian pipeline gas exports.

The company's Murmansk LNG project, however, is set "to be even larger than Arctic LNG-2, with an eventual output of 20.4 million tons per year," Reuters said.

The project also has access to an ice-free port in the Barents Sea, unlike the Arctic project.

While the flow of Russian pipeline gas into the EU dropped in 2022, several European countries saw record purchases of Russian LNG last year.

While the EU has banned the supply of equipment to Russia for the production of LNG, no EU-wide ban has been imposed on buying LNG from Russia.

EU pressures European importers to cut down Russian LNG purchases in 2024
“My message was that this year must bring further disengagement from Russian exports,” Energy Commissioner Kadri Simson told Bloomberg following an EU-U.S. Energy Council meeting in Washington.
Support independent journalism in Ukraine. Join us in this fight.
Freedom can be costly. Both Ukraine and its journalists are paying a high price for their independence. Support independent journalism in its darkest hour. Support us for as little as $1, and it only takes a minute.
visa masterCard americanExpress

News Feed

Ukraine Daily
News from Ukraine in your inbox
Ukraine news
Please, enter correct email address
10:26 PM

Senate Democrats back Johnson's foreign aid bills.

Senate Majority Leader Chuck Schumer said on April 19 that Senate Democrats will support House Speaker Mike Johnson's series of bills that includes aid for Ukraine, Israel, and other priorities if they pass the House.
10:01 PM

Russian attack on Kherson kills 80-year-old woman.

In a post on Telegram, the head of the city's military administration, Roman Mrochko, said the victim was walking the streets when she was hit in an attack launched from the occupied east bank of Kherson.
MORE NEWS

Editors' Picks

Enter your email to subscribe
Please, enter correct email address
Subscribe
* indicates required
* indicates required
Subscribe
* indicates required
* indicates required
Subscribe
* indicates required

Subscribe

* indicates required
Subscribe
* indicates required

Subscribe

* indicates required
Subscribe
* indicates required
Successfuly subscribed
Thank you for signing up for this newsletter. We’ve sent you a confirmation email.