Russia's Arctic Oil & LNG Projects, Northern Sea Route Expansion Grind To A Halt

[hatrack]

Moscow’s war against Ukraine is having a great toll also on one of the remotest part of the planet. The region that over the past years has been a top priority for the Russian government is now about to face a serious economic setback. Several of the new oil and gas projects, mines and infrastructure initiatives that until recently have been under development might now come to a grinding halt.

Natural gas company Novatek this week confirmed that it will stop the development of its liquified natural gas projects in the region. It will only complete the first train of the Arctic LNG 2, company representatives told Kommersant. According to original plans, the project’s first train is to come into production in 2023 and deliver 6,6 million tons of LNG to the market. The project train number two and three that were to be ready in 2024 and 2025 respectively will be postponed.

The announcement comes after French project partner Total made clear that it halts all new investments in Russia. Also other international oil and gas companies have made similar announcements. Among them are Baker Hughes, Halliburton and Schlumberger. Novatek is fully dependent on Western technology to follow up its major Arctic LNG projects. Both the Yamal LNG and the Arctic LNG are built with foreign equipment provided by companies such as Linde, Siemens and Baker Hughes.

EDIT

The new western sanctions against Russia will affect also several other industrial projects. State oil company Rosneft is in the process of developing what is due to become the biggest oil project ever in the Arctic, and is dependent on western technology to build both infrastructure and ice-class tankers. Also the investment basis of the project is now also increasing unclear as project partner Trafigura Group says that it is “reviewing its shareholding in Vostok Oil LLC.” The Vostok Oil includes the building of 13 gas and oil fields in the remote Taymyr tundra and the annual production of more than 100 million tons by 2030. On the Russian Arctic agenda is also the building of several mines, among them the Syradasaysky coal project in Taymyr. Also this project is dependent on western tech, at least for the building of ice-class bulk carriers that can export the coal.

EDIT

https://thebarentsobserver.com/en/industry-and-energy/2022/03/big-collapse-looms-over-russian-arctic-policy

[2naSalit]

1. Good.