Russia's Novatek will not be able to ship liquefied natural gas to China due to sanctions
LNG production at Arctic LNG-2 was about to start, but US sanctions prevented it
Novatek, Russia's largest liquefied natural gas (LNG) producer, has sent a force majeure notice to its customers regarding future deliveries from the Arctic LNG-2 project.
Source. Reuters reports this with reference to four sources.
The notice came after the United States imposed sanctions against the Arctic LNG project in November, which was supposed to start production early next year. The first line, with a capacity of 6.6 million tons of LNG, was scheduled to reach full capacity in the first quarter of 2024.
One of the sources said that such gas buyers as the Chinese companies Shenergy Group and Zheijang Energy, as well as the Spanish company Repsol, had received the notification.
The project participants, in addition to Novatek, which owns 60%, are France's Total (10%), China's CNPC (10%), CNOOC (10%) and the Japanese consortium Mitsui and JOGMEC (10%).
In November, the United States imposed sanctions on Arctic LNG-2, allowing it to complete certain transactions for the disposal, transfer of debt and assets of the company until January 31, 2024.
Earlier, restrictions were imposed on Arctic Transshipment LLC, which owns LNG terminals in Murmansk and Kamchatka, as well as the project's contractors.
The largest shareholders of Novatek are Leonid Mikhelson (24.76%) and Gennady Timchenko (23.49%). Timchenko is a friend of Putin's, ranked 7th in the Forbes ranking of the richest Russians with a net worth of $18.5 billion.
Background. As a reminder, the United States has announced its intention to "kill" the Russian LNG project Arctic LNG 2 – they plan to do so by imposing sanctions and cooperating with G7 partners.
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