A blow to the LNG industry in Russia: foreign shareholders of the Arctic LNG-2 project suspend participation, canceling contracts
Kyiv • UNN
Foreign investors suspend participation in Russia's Arctic LNG 2 project, jeopardizing long-term contracts. "Novatek may assume all project costs.
Foreign shareholders of the Russian Arctic LNG-2 project - France's TotalEnergies, China's CNPC and CNOOC, and a consortium of Japan's Mitsui and JOGMEC - have suspended their participation in the project, refusing to financing and supply contracts for the new Russian liquefied natural gas plant. liquefied natural gas (LNG) plant in Russia. This was reported by UNN with reference to Reuters and Russian media.
Details
The decision to freeze participation in the project by a number of international investors may result in "Arctic LNG 2 will lose its long-term LNG export contracts.
According to media reports, earlier the project has already faced difficulties due to US sanctions, the Russian-Ukrainian war and the lack of gas carriers.
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The project is controlled by Novatek (NVTK.MM), Russia's largest LNG producer and the owner of 60% of the project. But Chinese state-owned oil companies CNOOC Ltd (0883.HK) and China National Petroleum Corp (CNPC) also have 10% stakes in the project.
The initial investment in the the Arctic LNG 2 project amounted to $21 billion. Currently, the cost of "of Arctic LNG 2 has already increased by about 17% to $25 billion due to the need to purchase additional equipment.
The difference in value was supposed to be was supposed to be covered by the shareholders, as Kommersant points out. But now the burden of of shareholder financing may now fall entirely on Novatek, which will also be forced to sell LNG on the spot market.
Recall
The start of deliveries from the new Russian liquefied natural gas project will be delayed. after the company declared force majeure on supplies due to US sanctions. The news caused gas prices in Europe to rise.
Earlier, UNN reported that despite Russia's full-scale invasion of Ukraine, European countries continue to import to import Russian Arctic liquefied natural gas (LNG).
