Page 94 - bne IntelliNews monthly country report Russia February 2024

Shares of Novatek fell in price by almost 3.5% on December 21 on the Moscow Exchange and the price of LNG on Europe’s markets briefly jumped 8% after Reuters reported that Novatek notified some customers about possible difficulties with supplies from the Arctic LNG-2 project in 2024 due to force majeure.
Notifications were received by the Chinese Shenergy Group and Zheijang Energy, as well as the Spanish Repsol, as well as others. Novatek did not comment on the report. Repsol, which entered into a non-binding agreement for 1mn tonnes of LNG per year from Arctic LNG-2 back in 2019, said it had not received any notice of force majeure.
The force majeure reflects the fact that Novatek will now not be able to fulfil all contractual obligations due to sanctions, but does not mean a complete stop of the project, reports The Bell. Buyers insensitive to US sanctions will be able to purchase LNG on the spot, and in this case supplies will be limited by Novatek’s own tanker fleet.
“If the start of supply is delayed significantly or does not occur at all in 2024, global LNG supply will grow by 2.5% rather than 3.5%,” said Bloomberg analyst Talon Custer. “This could increase prices and volatility in the market.” Russia secured the top position among gas suppliers to Spain in June 2023 thanks to LNG shipments. Both Spain and Belgium have LNG terminals and large regasification facilities. The surge in LNG deliveries to Spain is a substantial shift from the previous year when Russia held the fourth position in gas supplies to the country, following the United States, Algeria, and Nigeria.
Data provided by the Spanish energy company Enagas reveals that Russia secured the third position in liquefied natural gas (LNG) supplies to Spain for the year 2023. Spain imported a total of 67,209 gigawatt-hours (GWh) of LNG from Russia between January and November 2023. This volume represents a significant increase of 39% compared to the 48,406 GWh imported during the same period in 2022.
Throughout the year 2023, Russia stood as the third-largest supplier of gas to Spain, trailing behind Algeria and the United States. In November 2023 alone, Spain received 6,439 GWh of LNG from Russia, marking a rise from the 5,953 GWh received in November 2022.
President Joe Biden's administration imposed sanctions on the Arctic LNG-2 project in Russia in December. The Office of Foreign Assets Control, part of the Treasury Department, also issued a general license that authorizes the wind down of transactions involving Arctic LNG-2, through January 31, 2024. Novatek, Russia's largest LNG producer, has a 60% stake, and plans to start production by the end of this year. Arctic LNG-2 would be Russia's third large-scale LNG project and is designed to help Russia achieve a goal of gaining 20% of the global LNG market by 2035, up from around 8% currently.
94 RUSSIA Country Report February 2024 www.intellinews.com