Novatek Sent Force Majeure Notices to Some LNG Buyers on Arctic LNG Project

Russia’s Novatek sent force majeure notices to some LNG buyers from its upcoming export facility Arctic LNG 2 as sanctions from the US threaten the start up of the facility that was scheduled in the coming weeks according to Bloomberg.

• The latest US sanctions directly target a major entity involved in the development the Russia Arctic LNG 2 project and follow sanctions on the use of Russian transshipment terminals in September.
• Arctic LNG 2 is part of Russia’s ambition to more than triple its LNG production by the end of the decade.
• The project set to start production “in a matter of weeks”, with the first train expected to reach full capacity in Q1 2024, Dmitry Artyukhov, governor of Russia’s Yamal region, said earlier this month. Arctic LNG 2 is set to have three lines with a capacity of 6.6mtpa each. The remaining two lines will start operations in 2024 and 2026, respectively.
• Front month TTF prices spiked shortly after the headlines, as this means there is likely to be no additional LNG supply over the winter period.
• TTF JAN 24 up 6.9% at 35.83€/MWh
• TTF Q1 24 up 6.8% at 36.06€/MWh