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Chinese yards to stop work on

modules for Arctic LNG 2

PROJECTS CHINESE yards are reportedly set to halt work work on modules for Train 3 of Arctic LNG 2
on modules for the Novatek-led Arctic LNG 2 was halted on April 29, and work on Train 2 is
project in Russia by the end of May. This comes due to follow by May 27. Train 2 is reported to be
amid increasingly strict Western sanctions tar- around 40% complete, and Train 3 is at less than
geting the Russian economy – including the 10% completion. Train 1 is thought to be at least
country’s energy sector – in the wake of the war 85-95% complete.
in Ukraine. The last delivery of modules for the project
Modules for the LNG facility are being pre- from China took place in February, days before
fabricated across several Chinese yards. Some Moscow launched its invasion of Ukraine. A
yards, including Penglai Jutal Offshore Engi- 12-tonne module was delivered via the North-
neering (PJOE) and Cosco Shipping Heavy ern Sea Route (NSR) in what was the first such
Industry, have completed construction on their voyage using the route that late in the winter. The
components for Arctic LNG 2 and are await- vessel carrying the module reportedly departed
ing instructions from France-based contractor Tianjin, China, on December 29, entered the
Technip Energies on shipping them. However, NSR at Cape Dezhnev on January 25, and arrived
construction remains ongoing at other yards, at the site of Arctic LNG 2 on February 17.
including Bomesc. Given the work stoppages in China, and the
Under the EU’s fifth sanctions package, Euro- fact that TotalEnergies, which has a 10% stake
pean companies face a firm deadline of May 27 in Arctic LNG 2, is withholding further funding
to conclude any outstanding deliveries. With the from the project, the chances of it coming online
deadline fast approaching, it seems increasingly as previously planned look increasingly slim.
unlikely that already completed modules can still Technip’s compliance with sanctions means it
be transported from China to the assembly site will likely have to hand over its $7.6bn contract
in Russia. for Arctic LNG 2, in what would likely be a com-
Industry outlet Upstream has reported that plicated process.™

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