HomeMediaLatest NewsNovatek will be able to temporarily place LNG from Arctic LNG - 2 on the spot market

Novatek will be able to temporarily place LNG from Arctic LNG - 2 on the spot market

17 January 2024

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to TASS on the prospects for LNG exports from the Arctic LNG 2 plant and the US sanctions pressure on Russian LNG production.

"Theoretically, the entire production volume of the first stage of the plant (6.6 million tons per year) can really be sold on a spot basis (contracts with a duration of up to three months). Spot may become a partial and temporary solution, but relying only on it is a constant risk that exerts strong downward pressure on selling prices (buyers may demand significant discounts)," Alexey Belogoryev believes.

However, as the expert noted, given the direct sanctions against the project operator, it is not yet clear who will be able to export in such a way that buyers do not feel threatened by secondary sanctions.

"The sanctions have effectively cut off the possibility for the plant to attract foreign freight, and it will probably have to rely only on the fleet owned by Russian companies or affiliated with them. Therefore, it is not at all obvious that in 2025 there will be enough ships to ensure the operation of the first two lines of the plant," Belogoryev said.

He believes that the United States is quite determined to prevent the full-fledged operation of Arctic LNG - 2, and the sanctions adopted in September - December 2023 are unlikely to be the last. However, according to the expert, they are not interested in Arctic LNG -2 by itself.

"The goal of the United States, as it seems to me, is more ambitious: to try to convince the global LNG market participants (potential consumers and traders) that it is not worth counting on an increase in LNG supplies from Russia at all, which means that more new liquefaction capacities need to be built in the United States itself. That is, by interfering with the work of Arctic LNG - 2, the United States is trying to undermine Russia's ambitious plans to increase LNG exports in the 2030s, scaring away all its main counterparties, and thereby help promote American LNG," Alexey Belogoryev noted.


You will receive notifications about the release of new materials on the site. We do not share email addresses with third parties and do not spam.
Thank you!
Your application is accepted.