Russian LNG struggles under US sanctions as buyers vanish
No one is interested in purchasing Russian liquefied gas, so Novatek's Arctic LNG 2 plant has reduced production. This is a result of the sanctions imposed on Russia by the United States.
The construction of the Arctic LNG 2 plant lasted almost 10 years and cost $25 billion. However, the Russians face a problem, as there are no buyers for their liquefied gas. Consequently, the surplus is being stored, and the plant has had to halve production—from 12 million cubic metres per day to 5 million cubic metres.
Since August, Arctic LNG 2 has produced eight batches of gas, but one couldn't be sold at all, even though the Russians offered discounts of up to 40% compared to market prices. Customers are cautious about accepting tankers from Arctic LNG 2, as the United States has imposed new sanctions on them.
Further US sanctions
Eight Russian-owned gas carriers were added to the sanctions list only in August. Novatek itself has been under American scrutiny since November of the previous year, causing foreign stakeholders to suspend their participation. Additionally, a South Korean shipyard refuses to deliver gas carriers to Moscow that perform well in the ice-bound Arctic.
