Page 93 - bne IntelliNews monthly country report Russia February 2024

behind closed doors, Kremlin press secretary Dmitry Peskov said Thursday. It’s unclear why Sechin felt the need to publicly air his grievances before the meeting.
● Novatek
Russia’s biggest LNG producer Novatek warned customers that it would not be able to meet all its delivery obligations in 2024 due to a force majeure on July 19 caused by sanctions imposed on the development of its Arctic LNG-2 project by the US, Bloomberg reports.
The Arctic LNG-2 project involves the construction of three gas liquefaction lines with a total capacity of 19.8mn tonnes per year based on the Utrenneye field on the Gydan Peninsula. The first line was planned to be launched before the end of this year, with shipments to begin in the first quarter of next year. Through the project, Russia wanted to triple its LNG capacity by the end of the decade.
Novatek has 60% of Arctic LNG-2. Other participants - the French TotalEnergies, the Chinese CNPC and Cnooc, as well as the Japanese consortium Mitsui / Jogmec - each own 10%.
Why is it important Novatek’s Arctic gas projects remained a bright spot for almost two years against the backdrop of the EU’s refusal of Gazprom’s pipeline gas, but this is gradually coming to an end.
The EU still imports 50% of Russian LNG but is preparing to eliminate this dependence. Unlike the US, the EU has not yet imposed any sanctions on liquefied gas imports. As a result, the EU remains the destination for 50% of Russian LNG exports. From December 2022 to October 2023, half of Russian LNG exports, worth €8.3B, were directed to the EU market.
In the past year, Russia became the second largest supplier of LNG to the European Union after the United States, which purchased more than half of all Russian LNG exports. In January-July, European countries spent almost 5.3bn euros on it, in Spain the share of Russian LNG exceeded a quarter, in Belgium - a third.
Moreover, Novatek successfully used European ports for gas transhipment (more than 20% of supplies) so as not to distract its icebreaking tankers with a long shoulder.
Russian LNG was included in the just adopted twelfth package of European sanctions, albeit with a delay of a year. The Arctic LNG-2 project itself was included in the US SDN sanctions list in November. And that is causing the current problems.
93 RUSSIA Country Report February 2024 www.intellinews.com