Arctic LNG 2 struggles as US sanctions hit Russian gas sales
No one is interested in purchasing Russian liquefied gas, so Novatek's Arctic LNG 2 plant has reduced production. This is due to sanctions imposed on Russia by the United States.
The construction of the Arctic LNG 2 plant lasted almost 10 years and cost $25 billion. However, the Russians have a problem, as there are no buyers for their liquefied gas. Consequently, the surplus is being stored, and the plant had to cut production by half—from 427 million cubic feet per day to 187 million cubic feet per day.
Since August, Arctic LNG 2 has produced eight batches of gas, but one of these couldn't be sold at all, even though the Russians offered discounts of up to 40% compared to market prices. Customers are cautious about accepting tankers from Arctic LNG 2 as the United States has imposed new sanctions on them.
Further US sanctions
Eight Russian-owned gas carriers were added to the sanctions list in August alone. Novatek has been under American scrutiny since November of the previous year, causing foreign stakeholders to suspend their participation. Additionally, a South Korean shipyard refuses to deliver gas carriers that perform well in the ice-bound Arctic to Moscow.
