Russia's Novatek says Arctic LNG 2 launch schedule may change

Leonid Mikhelson, head of Russian gas producer Novatek, said that the launch of its Arctic LNG 2 project might have to be changed due to challenges in implementing it, the Interfax news agency reported.

The $21 B project is key for Russia's plans to raise its share on global LNG market to a fifth by 2035, expanding its annual LNG output to 120 MM-140 MMt from around 30 MMt now.

The Arctic LNG 2 plant located on the Gydan peninsula was expected to start operations at its first of three lines in 2023. However, the plans have been under threat following a raft of Western sanctions, introduced since February over Moscow's military operation in Ukraine.

Interfax quoted Mikhelson as saying that it was hard to confirm the project's schedule. He also said that the project's first line is 85% complete, while the figure stood at 65% for the project on the whole.

Arctic LNG 2 has three operational lines with an annual capacity of 6.6 MMt of LNG each.

Analysts have said Russia will need to rethink its aim of attaining a 20% share of the global LNG market after EU sanctions targeted equipment it needs to expand production.

Novatek holds a 60% stake in the project while 10% stakes are held by France's TotalEnergies, Japan Arctic LNG (a consortium of Mitsui & Co and JOGMEC), and Chinese firms CNPC and CNOOC.

(Reporting by Reuters; editing by Jason Neely)

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