Russia says US will ‘destroy global energy security’ with Arctic LNG 2 sanctions



A Russian foreign ministry official has warned that US sanctions against the Novatek-led Arctic LNG 2 project in West Siberia will “destroy global energy security” and accused the US of “pursuing its own selfish interests”, almost two months after the White House first targeted the key liquefied natural development.

The 20 million tonnes per annum project is being heavily backed by the Russian government, with the development playing a key role in the country’s drive to almost triple its LNG exports to 100 million tonnes per annum by 2030 after its pipeline gas exports to Europe were suspended following Moscow’s invasion of Ukraine in early 2022.

“We consider such actions unacceptable, especially in relation to such large international commercial projects as Arctic LNG 2, which affect the energy balance of many nations,” Foreign Ministry spokeswoman Maria Zakharova told a weekly briefing in Moscow, according to Reuters.

The US-imposed sanctions have reportedly led operator Novatek — Russia’s largest independent gas producer — to issue force majeure notices to some of the scheme’s LNG buyers, informing them of its inability to start contracted shipments.

This in turn led to some of the project’s foreign shareholders — China National Petroleum Corporation (CNPC), China National Offshore Oil Corporation (CNOOC) and a consortium of Japan’s Mitsui and Jogmec — to take legal action that would temporarily relieve them of their obligations to the project, according to reports in Moscow.

Another stakeholder, France’s TotalEnergies, previously said it would comply with international sanctions and no longer provide financing for the project or invest in Russia following the Ukraine invasion.

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Zakharova, alluding to recent shake-ups in global gas markets, sought to place blame squarely on the US, which has seen a considerable rise in its own LNG exports following the Ukraine invasion.

“The situation around Arctic LNG 2 once again confirms the destructive role for global economic security played by Washington, which speaks of the need to maintain this security but in fact, by pursuing its own selfish interests, tries to oust competitors and destroy global energy security,” she said.

Japan’s Mitsui, which holds a minority share in Arctic LNG 2 through its investment venture Japan Arctic LNG with compatriot Jogmec, has decided to withdraw its employees from the project, according to reports in Japan’s daily newspaper Sankei Shimbun on Tuesday, citing several unidentified sources.

The decision aims to help protect company personnel seconded to work in Japan Arctic LNG from any impact that the the US sanctions may have on the scheme, Sankei Shimbun said.

However, the departure of personnel does not mean the Japanese company is exiting the project, according to the newspaper.

The US has set a deadline of 31 January 2024 for international companies to stop doing business with Arctic LNG 2.

Novatek had not replied to Upstream’s request for comment by the time of publishing.

Novatek holds a 60% interest in Arctic LNG 2, with TotalEnergies, CNPC, CNOOC and Japan Arctic LNG each holding 10%.