Russo-Ukraine War: Future of large-scale Russian LNG project in doubt
After the Russian invasion of Ukraine, the U.S. and a number of Western nations implemented sanctions against the Russian economy, also affecting the funding of oil and gas projects.
Russian natural gas producer, Novatek, which has close ties to the Kremlin, was unable to name a date for when its liquefied gas project Arctic LNG-2 will be up and running due to Western sanctions.
The company's CEO Leonid Mikhelson on Thursday said "under conditions of unprecedented challenges Novatek is working to specify the date and overall configuration of the project Arctic LNG-2.''
Mikhelson while speaking at an annual meeting admitted that sticking to the time frame the company had previously set out would be difficult.
Originally, the project was due to begin operations in 2023 and achieve its maximum capacity of 19.8 million tons of liquefied gas per year by 2025-26.
Currently, the first stage of constructing the LNG terminals was around 85 per cent complete, while the plant as a whole was around 65 per cent complete, according to Mikhelson.
Russian natural gas producer, Novatek
The project, which was estimated to cost a total of roughly 21.3 billion dollars, has run into financial difficulties.
"The company is setting up a new approach to the funding of Arctic LNG-2," Mikhelson said.
After the Russian invasion of Ukraine, the U.S. and a number of Western nations implemented sanctions against the Russian economy, also affecting the funding of oil and gas projects.
The French oil and gas company Total, which had a 10 per cent share in the project Arctic LNG-2, had discontinued its funding of the project as a result.