Sanctions brought Russian LNG along the Northern Sea Route to China
Russia's plan to rapidly expand liquefied natural gas exports is under threat from US sanctions that are delaying supplies from a major new project. A possible way out of the situation is described by energy markets observer Stephen Staprzynski.
The Arctic LNG 2 plant began production in December but has so far been unable to export gas due to US restrictions. According to Bloomberg, the company had to sharply reduce gas production in February. Since then, Arctic LNG 2 has been unable to export fuel and does not have enough space to store it.
Despite recent reports of production shutdowns, gas processing at the plant was completely stopped several weeks ago. This information is provided by Bloomberg, citing its sources at the company. It is unclear how long the delay will last. The sanctions disrupted the plant's plans to obtain specialized icebreakers needed to overcome icy waters.
The management of Novatek, which is the main shareholder of the project, is looking for ways out of this situation. According to Bloomberg insiders, the Russian company is in talks to sell its first batch to buyers in China, but the timing is unclear due to transportation problems. Arctic LNG's own gas carriers are blocked by sanctions, so it will be necessary to turn to the icebreaker fleet of Russian companies and use them on the Northern Sea Route to avoid sailing in waters under the jurisdiction of the West.
The company's plan is obvious - to send most, if not all, of the LNG via the Northern Sea Route to China and thereby close the issue, start production and by then solve the problem with the tanker fleet
– Staprzynski writes in X.
Ultimately, through their own actions, the United States did not achieve the elimination of the competitor, but, on the contrary, its likely appearance in one of the premium liquefied fuel markets - in China.
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