Western sanctions could accidentally divert Russian LNG to Europe as Novatek faces LNG carrier shortage | Popgen Tech
Novatek’s next Arctic LNG plant is expected to open in 2023, but due to sanctions against the Russian shipbuilding sector, the gas carriers intended to transport the LNG – currently under construction at the Zvezda shipyards – will be delayed by at least one year .
Originally, Novatek aimed to deliver 80 percent of LNG from this new plant to Asia, but without a sufficient number of Arc7 LNG carriers, the company will likely choose to ship its product along the much shorter route to Europe. Western sanctions targeting the shipbuilding sector may therefore have the unintended consequence of sending more Russian LNG to Europe.
Based on recent news, Novatek managed to overcome Western sanctions is focusing on the construction of its latest LNG plant and aims to largely complete its Arctic LNG 2 project on time. However, its shipbuilding partner, Zvezda Shipyards in Russia’s Far East, faces a significant delay in the production of much-needed Arc7 LNG carriers.
One year delay
The specialized vessels are key to transporting liquefied natural gas from the Russian Arctic to markets in Europe and Asia. Novatek and its shipping partners already operate a fleet of 15 Arc7 trucks, highly ice-capable tankers, transporting gas from the Yamal LNG project from the Arctic.
For Arctic LNG 2, the company ordered an additional 21 vessels, with a contract for 15 ships going to the Zvezda shipyards and work orders for six further ships going to Daewoo Shipbuilding and Marine Engineering (DSME) in South Korea.