MOSCOW (Pakistan Point News / Sputnik - 22nd May, 2022) At least five Chinese companies could suspend their work on Russia's Novatek-led Arctic LNG 2 project by the end of May due to the risk of sanctions, South China Morning Post reported, citing sources.
On May 10, Norway-based energy news outlet Upstream said that several Chinese firms received notifications to suspend their work on the Arctic LNG 2 project by May 27 as Russia sanctions involve restrictions on technologies necessary for natural gas liquefaction. These companies have been building units for French oil and gas company Technip Energies contracted to do engineering, procurement and construction works for Novatek. The companies were also barred from delivering already finished products, Upstream said.
"There is no final word on this matter yet," South China Morning Post quoted a source from China's Bomesc Offshore Engineering, which is building 10 modules for the Arctic LNG 2 project, as saying.
Apart from Bomesc Offshore Engineering, other Chinese companies involved in the project include Cosco Shipping Heavy Industry, Penglai Jutal Offshore Engineering, Wison Offshore Engineering and Qingdao McDermott Wuchuan, the newspaper said.
An unnamed Chinese producer noted that the company remained "in close communication with the parties involved" as the situation was "changing every day," according to South China Morning Post.
In late April, Technip Energies CEO Arnaud Pieton said that sanctions against Russia "will naturally have a more direct impact on the future execution of the project," adding that restrictions will be "making the execution (of the project) more complicated, maybe even highly complicated."
The Arctic LNG 2 is Novatek's second heavy-tonnage LNG project after the Yamal LNG. The resource base is the Utrenneye gas deposit located in Russia's Yamalo-Nenets Autonomous District. The project involves building three technological lines with a capacity of 6.6 million tonnes each (19.8 million tonnes of LNG per year).
Novatek initially planned to launch the first line of the Arctic LNG 2 in 2023, the second in 2024 and the third in 2025, but in April, the company declared a possible postponement and configuration change of the project due to the Western sanctions imposed on Russia.
Russia launched a special military operation in Ukraine on February 24 in response to calls for help from the Donetsk and Luhansk people's republics. Western countries have since introduced comprehensive sanctions against Moscow in the trade, energy, transport and financial sectors.
