HomeNewsRussia's Arctic LNG 2 gas output slashed in May

Russia's Arctic LNG 2 gas output slashed in May

7/16/2024

Russia's sanctions-hit Arctic LNG 2 project, which started production in December but has yet to begin exports, slashed its natural gas output in May.

According to sources, the liquefied natural gas (LNG) project, located in the Gydan peninsula in the Arctic, extracted around 55 MMm3 of natural gas in May, down from about 215 MMm3 in April.

It is the lowest monthly production for at least the past six months, the source said. Novatek, the operator of the project with a 60% stake, did not reply to a request for comment.

Vedomosti daily reported in April that Novatek, Russia's largest producer of LNG, cut gas production at the project to 83 MMm3 in February, a fraction of gas output at 425 MMm3 in December and 250 MMm3 in January.

The project had planned to start commercial deliveries of LNG in the first quarter of this year but its inclusion last year in Western sanctions over Russia's conflict in Ukraine prompted foreign shareholders to freeze participation and Novatek to issue a force majeure.

It has since faced problems securing specialist gas carriers to transport the gas, which is being liquefied under temperatures of –163°C (–261.4°F). A number of orders for tankers, including in South Korea, were cancelled due to sanctions.

Other shareholders in Arctic LNG 2 are France's TotalEnergies, China's CNPC and CNOOC, and Japan Arctic LNG—a consortium of Mitsui & Co. Ltd. and JOGMEC—each holding a 10% stake.

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