Arctic LNG-2 is Russia’s third major LNG project, which is on the Gydan Peninsula. Credit: Novatek.

Novatek, Russia’s LNG producer, has begun operations at its Arctic LNG 2 project despite US sanctions.

According to Bloomberg, Russia’s Deputy Prime Minister, Alexander Novak, said in an interview with a state-run TV channel at the end of last year: “We are expecting the first shipments from this project in the first quarter of next year.”

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The Arctic LNG project, located in Gydan in northern Russia, will produce around 19.8 million tonnes of LNG per annum, according to Offshore Technology‘sparent company, GlobalData. The estimated total investment required for this is $21.3bn (Rbs1.94trn).

In November the US imposed sanctions on Arctic LNG 2 in response to the continuance of the war in Ukraine, targeting Russia’s future energy capabilities. This derailed Novatek’s plans to begin production at the site in 2023.

Novatek owns 60% of the project, while TotalEnergies, China’s CNPC and CNOOC, and a consortium of Japanese trading house Mitsui & Co and Jogmec each hold a 10% stake.

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South Korean shipbuilder Samsung Heavy Industries ceased production of blocks and equipment for ten out of the 15 Arctic LNG carriers and Mitsui & Co pulled its employees out of the project at the end of December.

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China has been critical of the US sanctions on Arctic LNG 2. The project is part of Russia and China’s ‘no limits’ partnership and disruptions to its operations are therefore also interfering with Beijing’s energy plans. According to Reuters, at a regular press conference Chinese Foreign Ministry spokesperson Mao Ning said that the two countries’ relationship “should not be interfered with or restricted by any third party”.

“China has always opposed unilateral sanctions and long-arm jurisdiction without the basis of international law,” she added.

Arctic LNG 2 operations could significantly add to global supplies as European countries become increasingly reliant upon it to fulfil energy needs.