Two gas megaprojects to be suspended in Russia due to sanctions – Russian media

Western sanctions against Russian gas company Novatek have worked: the company has frozen its plans to build new gas liquefaction plants.

Source: Russian media outlet Kommersant

Details: This refers to Murmansk LNG, which was supposed to become Russia's largest gas liquefaction plant (three liquefaction lines of 6.8 million tonnes each), and Obskoye LNG in the Arctic port of Sabetta (two liquefaction lines of 3 million tonnes each).

Both projects have been suspended, and no active work is underway on either of them. There is no information on when Novatek will return to the development of these projects, as the company has been focusing on completing Arctic LNG-2 and establishing shipments from this plant.

Due to the sanctions, the construction of the Obskoye Gas Chemical Complex may become a priority for Novatek. Novatek wants to produce ammonia and urea there and then export these products across the Arctic Ocean to Asia-Pacific countries. Urea exports require ice-class bulk carriers, but they are easier to build than LNG carriers.

The Murmansk and Obskoye LNG plants were to be Novatek's next projects after Arctic LNG-2. The Obskoye plant was planned to be built in conjunction with the Obskoye Gas Chemical Complex.

The first line of the Arctic LNG-2 has been built, but exports from it are hampered by Western sanctions.

Background:

• Wien Energie GmbH, which supplies energy to two million people in and around the Austrian capital, has announced that it will get rid of Russian fuel for the first time in decades starting in 2025.
• Russia will lose about US$6.5 billion annually at current prices when it loses gas transit capacity through Ukraine.
• Russia's plans to increase gas exports will rely on a project which is subject to US sanctions to produce liquefied natural gas in the Arctic. 

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