Russian energy company Novatek plans to start delivering the foundations for the second stage of its Arctic LNG 2 plant in late July, according to Reuters.
Despite facing Western sanctions that limit access to technology and tankers, Novatek is moving forward with this delayed project.
Initially, Novatek’s $21 billion Arctic LNG 2 project aimed to be Russia’s largest LNG plant, with an annual output of 19.8 million metric tons of LNG and 1.6 million tons of stable gas condensate from three production trains.
The project began tentative production in December on the Gydan peninsula but has yet to deliver its first LNG cargo.
According to Reuters, sanctions imposed due to Russia’s conflict in Ukraine have significantly impacted the project.
Restrictions on ice-class tankers forced Novatek to scale back the Arctic LNG 2 project and instead focus on development at the ice-free port of Murmansk.
Additionally, the involvement of foreign shareholders has been frozen, and Novatek issued a force majeure notice, indicating it could not meet contractual obligations.
Further complications arose when Chinese engineering firm Wison New Energies decided to discontinue all Russian projects and indefinitely halt any new Russian business.
The delivery of gravity-based structures (GBS), crucial for the LNG production site, is set to start from the Murmansk region between July 22-25.
The Belokamenka facility in Murmansk, which specializes in mass production of natural gas liquefaction trains on GBS, will supply these platforms. Although used in North Sea gas projects, this marks the first use of GBS platforms in Russia.
Novatek holds a 60% stake in Arctic LNG 2, with other shareholders including TotalEnergies (10%), China’s CNPC (10%) and CNOOC (10%), and Japan Arctic LNG (10%), a consortium of Mitsui & Co., Ltd. and JOGMEC.
Last year, Russian President Vladimir Putin oversaw the departure of Arctic LNG 2’s first line via the Northern Sea Route from the Murmansk region.
