Novatek aims to start-up its Arctic LNG 2 project’s first train in 2023.
Novatek aims to start-up its Arctic LNG 2 project’s first train in 2023 as the Russian private-owned operator’s CEO Leonid Mikhelson has said that the company would have a better idea by the end of the year about the timeline for the completion of the project’s further trains.
He had earlier admitted that Novatek’s LNG developments are “complicated by international sanctions” and he no longer can confirm formerly adopted timelines for projects such as the Arctic LNG 2.
Global LNG Info’s Analytics has assessed that construction of the 19.8 MMT/Y Arctic LNG 2 project’s first train has technically progressed as schedule and it likely will start its commercial operation in the fourth quarter of next year or first quarter of 2024; however given to the extensive US and European sanctions, commissioning of the next trains (T2&3) in 2024-2025 and 2025-2026 would be complicated.
As of April 2022, total project was 63% complete, with technical progress on the first train estimated at 88%.
The European Union's fifth package of sanctions against Russia following its invasion of Ukraine bars the delivery of equipment and technologies required for gas liquefaction projects.
Novatek has licenses from Linde to utilize the German company’s liquefaction technology for 12 trains, including the three at Arctic LNG 2 but Linde has recently said it would suspend new Russian projects.
The Arctic LNG 2 project’s one of the main EPC contractor Technip Energies expects the latest European sanctions against Russia to have a more direct impact on the execution of the project. The “sanctions could make the execution of the LNG project in the Russian Arctic more complicated, maybe even highly complicated” as they could significantly reduce the involvement of Technip Energies in the project beyond the second quarter of this year, the French engineering company has reminded.
Last month, the project’s Japanese partner Mitsui revealed that it took a loss and write-off related to its 10% stake investments in the project as the company remains undecided if or in what form it will continue being involved in the project.
In the most recent development, Russian Kommersant has reported that Baker Hughes will no longer provide engineering services to Russian LNG developers and stop deliveries of equipment to the country which could be a big setback for the Novatek’s LNG projects i.e. Yamal LNG and the Arctic LNG 2.
The US company delivers turbines to the Arctic LNG 2, and the Russian operator has reportedly installed only about half of the seven turbines needed to run the project.
Novatek will not be able to get needed spare parts to the on-stream Yamal LNG while the construction of the Arctic LNG 2 might not be completed.
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