As the world’s fourth-largest LNG producer behind the United States, Qatar and Australia, Russia aims to increase its global market share to about a fifth from the current 8%, tripling production to more than 100 million metric tons by 2035.
“The impact of restrictions on LNG is more severe due to the relatively small number of tankers capable of transporting gas and Russia’s lack of access to technology and finance,” the material says.
Russian efforts to redirect gas sales to China, the world’s second-largest energy consumer after the United States, have so far had limited success.
Lengthy negotiations to more than double current gas sales to the country through the proposed Power of Siberia 2 pipeline have yet to result in a credible contract.
Problems with the Arctic LNG-2 project
Reuters writes that the Arctic LNG 2 project, which is controlled by Russia’s largest LNG producer Novatek, is facing delays.
Commercial LNG deliveries from the project are not expected until the second quarter of 2024 or later, while Novatek said it would begin deliveries in the first quarter.
The capacity of Arctic LNG-2 with three lines will be 19.8 million tons per year and 1.6 million tons of stable gas condensate per year. US sanctions have already led Novatek to declare force majeure on supplies for the project.
The problem with tankers
Novatek said that for the Arctic LNG-2 project, 15 Arc7 ice-class tankers, capable of breaking through ice 2 meters thick, will be built at the Russian Zvezda shipyard.
Another six Arc7 tankers were to be built by Hanwha Ocean, formerly Daewoo Shipbuilding & Marine Engineering, including three ordered by Japan’s Mitsui OSK Lines and three by leading Russian tanker group Sovcomflot.
But three tankers ordered by Sovcomflot were canceled due to sanctions against Russia. Hanwha stated this in regulatory documents.
US sanctions against Arctic LNG-2
On November 2, the Arctic LNG 2 project was included in the US sanctions list regarding Russia’s production and export capabilities in the energy field.
US Assistant Secretary of State for Energy Geoffrey Pyatt stated that Washington aims to “strangle” this Russian project.
Bloomberg recently wrote that the start of gas supplies from Russia’s newest Arctic LNG 2 will be delayed after the company declared force majeure due to US sanctions.
Reuters also wrote that Chinese state-owned oil companies CNPC and CNOOC asked the US government for exemption from sanctions regarding the Russian Arctic LNG-2 project.
It recently became known that the Japanese company Mitsui&Co has recalled all employees from the Arctic LNG-2 project for the development of liquefied natural gas.
#Russian #Federation #faces #problems #LNG #sector #due #sanctions #Reuters
2023-12-28 21:25:24
