Novatek has found a "loophole" to circumvent sanctions and sell gas abroad despite restrictions. To do this, the Russian natural gas producer is opening an office in China. Reuters writes and UNN reports.
Details
According to Reuters sources, Russian natural gas producer PAO NOVATEK has set up a new team in China to study fuel marketing. In this way, the company plans to circumvent US sanctions that hinder their plans to export from the Russians' multibillion-dollar project in the Arctic.
A deal in China could help Novatek find customers for its new Arctic LNG 2 liquefied natural gas (LNG) project after US sanctions are imposed.
In recent months, Russia's largest LNG producer has been assembling a business development and marketing team in Beijing. Reuters' sources refuse to name the members of this team because they are not authorized to speak to the media.
However, it is known that the new team is headed by Xu Jinhai, a former executive director of the Russian energy lender Gazprombank.
On Tuesday, February 6, a Reuters journalist visited Novatek's office in a Beijing skyscraper and personally spoke with Xu. However, he refused to comment to the reporter without the permission of Novatek's headquarters.
Novatek did not immediately respond to a request for comment.
Перероблена російська нафта і далі потрапляє в Британію через "лазівку" – ВВС05.02.24, 19:30
Context
Arctic LNG 2, part of Russia's drive to become the world's leading LNG supplier, was hit by US sanctions last November, ahead of its scheduled launch this year.
Novatek and partners, such as France's TotalEnergies TTEF.PA, have warned their customers, including China's Shenergy Group and Zhejiang Energy, as well as Spain's Repsol, that there will be no supplies.
Other investors in Arctic LNG 2, including China National Petroleum Corp (CNPC) and CNOOC Ltd, have been seeking to lift the sanctions imposed by the United States.
This is an attempt to reorient the portfolio to the potential market of Chinese clients who could cope with the sanctions regime.
Another of the six sources noted that the new Beijing office has hired approximately 10 people in recent months. A Russian recruitment website has posted at least two vacancies for Novatek's Beijing business.
The creation of the Chinese unit follows the departure of most of NOVATEK's Singapore-based LNG marketing and trading team over the past few months due to concerns that sanctions would affect the business, a Chinese executive close to the company said.
Optional
It is worth noting that despite the fact that the leaders of China and Russia have stated that their countries are bound by unbounded friendship. And China has openly criticized a number of US sanctions programs, it is still afraid of violating these sanctions restrictions.
Last year , China overtook Japan as the world's largest buyer of LNG.
For reference
However, Novatek's attempts to sell fuel from Arctic LNG 2 are facing numerous sanctions-related difficulties, according to two sources who are heads of trade with Chinese importers.
"Novatek owns 60% of Arctic LNG 2, but the ownership also includes a Japanese consortium that owns 10%, as well as TotalEnergies, CNPC and CNOOC Ltd 0883.HKat 10% each.
In addition, Novatek suffers from a shortage of vessels, including ice-class tankers, to deliver LNG to long-term customers, who have mostly signed their contracts on a delivery basis.
Russian media reported that Novatek wants to start loading the first cargo from the Arctic LNG 2 plant in February. Its cost is estimated at $21 billion. Experts noted that Arctic LNG 2 is designed to export 19.8 million metric tons of LNG per year.