2024-04-02 23:21:00
Russia’s plan to rapidly expand its liquefied natural gas (LNG) exports is stalling because of US sanctions, which are delaying deliveries from a major new project, reports Bloomberg.
Gas pipelines in the Yamal peninsulaPhoto: Alexander NEMENOV / AFP / Profimedia
The Arctic LNG 2 facility started production in December, but so far has not been able to export gas due to US restrictions, reports the economic agency Bloomberg, cited by Agerpres. Production was significantly reduced in February, according to data analyzed by Bloomberg. The publication Vedomosti, the first to report the drop in production, reported that Arctic LNG 2 might not export fuel and did not have enough storage space.
Novatek PJSC, the main shareholder of the unit near the Arctic Circle, intended to start deliveries by March 31. Officials of the Russian energy company did not respond to requests for comment, according to Bloomberg.
Novatek has been negotiating to sell LNG to buyers in China, but it is not known when it will be able to do so due to fears of US retaliation, sources told Bloomberg on condition of anonymity.
These developments show how difficult it will be for Russia to meet its goal of tripling LNG exports by 2030. The country, the world’s largest exporter of liquefied natural gas before the invasion of Ukraine prompted Europe to shun pipeline purchases, exported regarding 32 million tons of LNG last year, a fraction of the total global trade of 412 million tons.
In November, the United States imposed sanctions that targeted Novatek, but also determined the exit of other investors from Arctic LNG 2, including TotalEnergies SE and Mitsui & Co, both declaring force majeure.
Gas production at the Arctic LNG 2 project was 83 million cubic meters in February, compared with 250 million cubic meters in January and 425 million cubic meters in December, according to data analyzed by Bloomberg.
Novatek is looking to send most of its LNG to China via the Northern Sea Route, which connects Europe and Asia, and is also trying to find buyers in India, the sources said.
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