Arctic LNG Update:

Arctic LNG is part of Russia’s plan to secure a 20% share of the global LNG market. The project will have a capacity of 19.8m mtpa and would help raise Russia’s LNG production to 100m mtpa by 2035.

• Arctic LNG will start its first LNG shipments in Q1 2024, according to Russia’s Deputy PM Alexander Novak. The original schedule was for loadings to commence in January.
• Operations have begun on the first train, Novak said Dec. 27
• However, the USA imposed sanctions on the project in November saying its goal was to kill the project.
• As a result, Arctic LNG’s customers had been sent force majeure notifications regarding future LNG supplies from the project. The Force Majeure was caused by sanctions imposed on the project by the USA in November.
• China and Japan have expressed concern over the sanctions and have requested an exemption. Mitsui has already pulled its employees from the facility. Both countries are seeking exemptions
• Even with the sanctions, this does not mean exports will be curtailed. Instead, it will depend on freight availability of ice-class tankers to deliver the volumes to the limited pool of buyers willing to ignore the sanctions.
• 21 ice class tankers have been ordered for the project, although delivery of some have been delayed due to the sanctions.
• Novatek holds a 60% stake, while CNCP, CNOOC, Mitsui, and Total hold 10% each.