Russia’s next-up liquefaction project Arctic LNG 2 has been sanctioned by the US as it moves to limit the country’s energy production and exports in the fallout from its invasion of Ukraine.
In sweeping additions to its sanctions list, the US Department of State, working with the Department of the Treasury, has designated Arctic LNG 2 — the operating company of Russian energy company Novatek’s under-construction liquefaction project — as a sanctioned entity.
The US State Department noted Novatek had been added to the Office of Foreign Assets Control’s Sectoral Sanctions Identifications List in 2014.
Russia is pushing to start up a first 6.6-million-tonnes-per-annum liquefaction train for Arctic LNG 2 by the end of this year.
The project’s schedule has been set back after Western contractors were forced to withdraw from the project in the wake of European sanctions against Russia.
However, the gravity-based structures modules that form the base of the project’s three liquefaction units are being built in China and delivered via the Northern Sea Route. Work on the second is already advanced.
The Gydan Peninsula-based project has been designed to supply 19.8 mtpa of LNG to global markets.
Europe is still importing Russian LNG from the country’s first Arctic project Yamal LNG. But there have been growing calls from the European Union and some nations in the bloc to end these shipments.
The sanctioning of Arctic LNG 2 comes after the US slapped sanctions in September on the two giant floating storage units — the 361,600-cbm Saam FSU and Koryak FSU — which were put into place in Ura Bay off Murmansk and Bechevinskaya Bay off Kamchatka Peninsula, at either end of the Northern Sea Route.
Non-ice-class ships
The huge FSUs have been designed to be supplied with LNG from the upcoming Arctic project using a fleet of new ice-breaking Arc7 LNG carriers that are under construction in Russia and South Korea.
Under Russia’s plan, non-ice-class vessels would then take on cargoes from the FSUs for onward shipment. However, the sanctions may limit which LNG carriers will be able to load at the giant units.
In September, the UK added Novatek chairman of the management board Leonid Mikhelson to its list of sanctioned individuals. But Mikhelson has not been sanctioned by the European Union yet.
