Russia's Arctic LNG 2 project has cut gas production to almost zero, Bloomberg reports

Russia's Arctic LNG 2 project cut production from its gas fields to almost zero in November after halting liquefaction last month due to Western sanctions, Bloomberg reported on Nov. 12, citing its undisclosed sources.

Arctic LNG 2, owned by Russia's Novatek company, aims to produce almost 20 million metric tons of liquified natural gas (LNG) per year to sell primarily to Asian markets, potentially generating billions of dollars in revenue.

It was envisaged as Russia's largest LNG plant and a flagship project to help the country become the world's leading LNG producer.

The fields supplying the plant pumped an average of 0.4 million cubic meters of gas per day in the first ten days of November, Bloomberg reported, citing a person with knowledge of industry data.

This is a drop of more than 90% from the average production in October, according to Bloomberg's calculations.

This figure is also the lowest average production level for the Russian project since at least September 2023. Back in the fourth quarter of last year, even during the commissioning and start-up of the first line of Arctic LNG 2, its fields produced from 2 million to almost 14 million cubic meters per day.

Arctic LNG 2 is key to Russia's efforts to increase LNG exports and develop the Northern Sea Route. Over the past year, it has been the target of several waves of Western sanctions.

The U.S. State Department announced sanctions against two vessels and two entities connected to Russia's sanctioned Arctic LNG 2 project on Sept. 5.

American sanctions previously targeted the Arctic LNG 2 project in a round of sanctions in late August, likely forcing Novatek to scale back the plans. Novatek itself was sanctioned after the outbreak of the full-scale invasion in 2022.

The Financial Times reported in July that Russia is likely expanding its "ghost fleet" of tankers, created primarily to avoid Western oil sanctions, to LNG exports as well.

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