Page 12 - FSUOGM Week 17 2022

FSUOGM PROJECTS & COMPANIES FSUOGM

Novatek warns of Arctic LNG-2 delay

RUSSIA PROSPECTS for Russia’s second-biggest LNG withdrawal.
exporter Novatek look in doubt, after its CEO Novatek might have to rely on its proprie-
Novatek is having Leonid Mikhelson warned at a sharehold- tary Arctic Cascade liquefaction technology at
problems with ers meeting last week that the schedule for the project, Mikhelson said. Previously it was
sanctions. its upcoming Arctic LNG-2 project could be expected to use technology supplied by Germa-
delayed because of sanctions. ny’s Linde, but the company said on March 17 it
Arctic LNG-2 has relied significantly on was winding down its Russian business. Making
Western equipment and technology, not to matters worse, Arctic Cascade has only been tri-
mention financing to cover its $21bn cost. But alled once, at a 0.9mn-tpy mini-train at Novatek’s
sanctions have meant many Western companies Yamal LNG plant. And Mikhelson has acknowl-
involved in the development have had to pull edged previously that the technology “works,
out. Mikhelson acknowledged that the project but it is bad.” Speaking in September last year, he
is “strained” because of complications caused blamed Russian manufacturers for poor work-
by sanctions, and that Novatek may not meet its manship, noting that the company had brought
deadlines. claims against almost all the suppliers involved
Under a final investment decision taken in in the project.
2019, Arctic LNG-2 is scheduled to start up Likely reflecting the fact that some of its cap-
in 2023 and reach its full three-train capac- ital investment plans have been put on hold,
ity of almost 20mn tonnes per year in 2016. shareholders at the meeting approved the board’s
But while its equity partners in the project proposal to double dividends. However, in an
including France’s TotalEnergies have decided announcement on April 24, the company said it
to remain, several financiers, insurers, con- had decided not to publish its financial results for
tractors and suppliers have announced their the first quarter. ™

NEWS IN BRIEF

Oil loading at second CPC Russia to relax ecological attention to ESG metrics and (2) to comply
with cross-border environmental taxes such
pipeline mooring point requirements for industry as the EU carbon tax.
However, given the unprecedented
resumes Russian authorities are considering Western sanctions, these two incentives
ceased to be relevant and domestic growth
relaxing ecological requirements for local
Oil loading at a second of the three single- industrial producers, Kommersant and concerns have become more urgent.
point mooring systems of the Caspian Izvestiya dailies reported citing memos of Investors will now view Russian assets as
Pipeline Consortium (CPC) pipeline at the national ecological council that met on toxic with or without ESG at least in the
Russia’s port of Novorossiisk has resumed, March 29. medium term. And possible disruptions
CPC said in a statement on April 24. As suggested by bne IntelliNews, Russia's on cross-border trade would make ESG
The CPC pipeline, which stands as ambitious ESG state agenda is now likely concerns for exports irrelevant.
Kazakhstan's key crude export route, saw its to be shelved amid the unprecedented
loading suspended on March 23 after storm economic fall-out of the military invasion of
damage was claimed by Russia. Ukraine. Export of gas via TANAP
CPC noted that loading of the tanker Indeed, reportedly the co-efficients
Delta Commander at the SPM 3 mooring for compensating greenhouse gas (GHG) to Turkey and Europe in Q1
point was in progress, after a brief emissions will reportedly be cut five-fold,
improvement in weather conditions on sharply reducing the ecological cost burdens amounted to 4 bcm
April 23 allowed for subsea work. SPM 1 on industrial companies amid Western
continued to operate normally, whereas sanctions. Other measures to relax the ESG The volume of transportation of
SPM 2 remained temporarily offline, CPC costs could be extending the duration of Azerbaijani gas through the Trans-
added. the Clean Air state programme to lower its Anatolian gas pipeline (TANAP) to Turkey
Kazakhstan has previously said that two costs. and Europe in the first quarter of 2022
out of three SPMs operating were sufficient Prior to the invasion of Ukraine, Russia amounted to 4.01 bcm, Rovshan Najaf,
for normal loading volumes. was set to launch a four-decade-long, acting president of SOCAR said on 24
The increase in loading is set to help RUB480 trillion ($5.7 trillion at the time) April.
boost crude supply in the Mediterranean investment campaign to reduce carbon “From the moment TANAP was put into
region. Kazakhstan is the second largest emissions by 60% before 2050, out of which operation and as of April 1, 2022, 26.13
non-OPEC producer in the OPEC+ crude RUB89 trillion ($1.2 trillion) would come bcm of gas have been transported through
production group. from public funds. this gas pipeline. In the first quarter of
The Russian state and corporate green 2022, 4.01 bcm of gas were delivered via
drive had two main reasons: (1) to attract the TANAP gas pipeline to the markets of
investors that are paying increasing Turkey and Europe,” Nacaf wrote on his

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