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August 9, 2022

Saipem looking to close contracts related to Russia’s Arctic LNG 2 project

The $21.3bn project is expected to have production capacity of almost 20Mtpa of liquefied natural gas.

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict


Saipem is in deliberations to terminate contracts pertaining to the $21.3bn Arctic LNG 2 project in Russia, Reuters reported citing the Italian firm’s interim financial statement.

Located in the Gydan Peninsula in the western Siberia region of Russia, the project is expected to have a production capacity of almost 20Mtpa of liquefied natural gas.

The two contracts were awarded earlier by Arctic LNG2, a company created by Novatek (60%) and Ekropromstroy (40%).

Saipem, which has only two projects related to the Arctic LNG 2 project in Russia, reported a backlog of around €1.4bn ($1.43bn) for its operations in the country, according to the news agency.

The Italian firm signed one of the two contracts in joint-venture (JV) with Turkey’s Ronesans and the other with France’s Technip.

SaRen, a 50-50 JV between Rönesans’ industrial division Renaissance Heavy Industries (RHI) and Saipem, was contracted in 2018 for manufacturing, transport, and assembly works for the three components of the Gravity Base Structure (GBS) of the Arctic LNG 2 terminal project.

In 2019, Saipem joined a JV of Technip and NIPIgaspererabotka to provide engineering, procurement and construction (EPC) services for the Arctic LNG 2 project.

The scope of the contract covers the detailed design, procurement, fabrication, construction, commissioning and start-up of three LNG trains at the Arctic LNG 2 project.

Last month, Technip said it was considering exiting from the Arctic LNG 2 project in the wake of Russia’s invasion of Ukraine.

Prior to the Ukraine conflict, the Arctic LNG 2 project was scheduled for launch in 2023 and to reach full production capacity by 2026.

In June 2022, Novatek CEO Leonid Mikhelson said the company plans to start the project’s first /line in 2023.

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