The start of deliveries from Russia's newest liquefied natural gas project will be delayed after the company declared force majeure on supplies due to U.S. sanctions. Against the background of this news, gas prices in Europe rose. This was reported by Bloomberg on December 21, writes UNN.
Details
Russian PJSC Novatek, which is engaged in the Arctic LNG 2 project, has reportedly sent force majeure notices to some buyers of the facility, citing sources. According to them, sanctions imposed by the US on the project in November make deliveries impossible at the moment.
"While the prospects for Arctic LNG 2 have already been clouded by US measures, the move presents serious challenges for the project and could limit additional LNG supplies to the global market this winter," the publication wrote.
"Novatek planned to start production on the first of the three lines by the end of the year, with the goal of receiving first deliveries from the plant in early 2024.
Force majeure "does not necessarily mean that LNG from Arctic LNG-2 will not be exported, only that external factors are likely to prevent Novatek from meeting all of its contractual obligations," Energy Aspects Ltd. analyst Jake Horslen said in a research note. Jake Horslen.
European gas prices rose 8.3% before climbing 2% to 34.20 euros per megawatt-hour. Novatek shares clawed back earlier gains in moscow, falling as much as 4.8% to close at their lowest level since July.
"Arctic LNG 2 is critical to Russia's ambition to more than triple its LNG production by the end of the decade. The plant will also supply a significant portion of the LNG supply expected to be in 2024, said Talon Custer, an analyst at Bloomberg Intelligence.
"If the project is significantly delayed or no supply is shipped next year, it would severely limit global LNG supply growth to about 2.5% versus the 3.5% we have forecast," he said. - Supply growth lower than expected could lead to higher prices and increased volatility."
Supplement
"Novatek owns 60% of the project. The remaining part is owned by France's TotalEnergies SE, China's CNPC and Cnooc, and a consortium of Japan's Mitsui & Co. and Jogmec trading house.