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Thursday, February 22, 2024

Russia's Arctic LNG 2 Last Line is on Hold

Maritime Activity Reports, Inc.

February 8, 2024

Source: TotalEnergies

Source: TotalEnergies

The third and the last train of the Arctic LNG 2 project in Russia has been put on hold but the second train is likely to be installed, the head of stakeholder TotalEnergies' said.

The liquefied natural gas (LNG) project in the Russian Arctic has faced challenges from U.S. sanctions imposed on the project last November over the conflict in Ukraine, and subsequent force majeures by shareholders.

At the end of 2023 Arctic LNG 2 started tentative production at its first train, which is yet to deliver a first cargo. Russia planned to put the third train into operations in 2026.

An LNG train processes and converts natural gas to LNG.

"The third train for me is on hold, which I understand," TotalEnergies' CEO Patrick Pouyanne told an event on Wednesday in London, adding that he believed the project's stakeholders were willing to install the second train.

Novatek, Russia's largest LNG producer, owns a 60% stake in the project with China's state oil majors CNOOC Ltd and China National Petroleum Corp (CNPC) each holding a 10% stake. TotalEnergies and a consortium of Japan's Mitsui and Co and JOGMEC also have a 10% stake each.

Novatek did not reply to a request for comment.

With three processing trains, Arctic LNG 2's capacity is meant to be 19.8 million metric tons per year and 1.6 million tons per year of stable gas condensate.

TotalEnergies initiated a force majeure process on the project in January following the U.S. sanctions.

Pouyanne said TotalEnergies was not taking part in the project's management due to Western sanctions.

"Today, we are no longer in the governance (for the project)," Pouyanne said, explaining that he did not want to expose the French company to any type of secondary sanctions.

(Reuters - Reporting by Forrest Crellin in Paris; additional reporting by Vladimir Soldatkin in Moscow; Editing by Susan Fenton)

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