Arctic LNG 2
Russia
Ural Federal District of the Russian Federation
New Urengoy
629309, Yamalo-Nenets Autonomous Okrug, md. Slavyansky, 9, office 117
Owners:
Novatek - 60%
China National Petroleum Corporation, CNPC - 10%
China National Offshore Oil Corporation (CNOOC) - 10%
(as of September 2022)
Owners
Main article: Gas exports from Russia
Arctic LNG 2 is a project of the company "," Novatek associated with the production of liquefied natural. gas
The project operator and owner of all assets is Arctic LNG 2 LLC - for 2022 a joint venture:
- Novatek PJSC (60%),
- group TotalEnergies (10%),
- Chinese corporations CNPC (10%) and CNOOC (10%) and
- Japan Arctic LNG (consortium of Japanese companies Mitsui and Jogmec) (10%).
Arctic SPG-2 - concentration of breakthrough technologies in Russia
For 2023, the Arctic LNG-2 project is one of the few in the world competing with the projects of American LNG suppliers. The project consists of several blocks, each of which is a unique engineering solution.
Factory plants in Murmansk
This is the production of offshore platforms for LNG production. The Center for Construction of Large-Capacity Offshore Structures (CSCMS) is implemented in accordance with Order of the Government of the Russian Federation of 17.06.2015 No. 1129-r. CSKMS was given the status of a strategic investment project, as well as a large-scale investment project in the Murmansk region. The uniqueness of this enterprise is that plants based on concrete barges are assembled on it in a ready form. These structures are transported by sea to offshore gas fields, installed on the ground, when ballast tanks are filled, connected to gas pipelines and very quickly started working. Such an extremely efficient and non-standard solution avoids the costs associated with capital construction in permafrost conditions, transportation, installation and adjustment of equipment. Almost the entire range of work is carried out in comfortable factory conditions, after which the ready-made LNG production complex is simply transported to the point and connected to the local gas pipeline.
The use of all mobile offshore platforms allows you to quickly and efficiently scale the project, reducing the cost of commissioning new capacities and providing flexibility in using existing ones.
Icebreaker Fleet
The Arctic LNG project gave a powerful impetus to the development of the Northern Sea Route infrastructure, the construction of nuclear icebreakers and ice-class gas carriers. Some of the ships for use on the Northern Sea Route are in operation at the shipyard SSK 'Zvezda' in Vladivostok. As of 2023, a total of 15 vessels are planned to be built at the Russian enterprise and 5 + 1 UGS at the South Korean Daewoo Shipping & Marine Engineering (DSME).
One of the most problematic areas is shipbuilding and engine building for ships. Since the continuation of cooperation with Daewoo shipyards is impossible due to US sanctions (now only the completion of old contracts is underway), the Russian side is urgently forced to look for a replacement for foreign technologies and components.
Objectively, there are big problems in these areas, especially in the production of marine engines. This industry was almost completely destroyed in the 1990s, and to restore production potential, not only funds are needed, but also competent specialists, access to modern technologies and scientific developments. Work in this direction is carried out within the framework of the profile state program. The envisaged amount of financing is 5.5 trillion rubles.
Transshipment points
In parallel with the development of gas production and LNG production directly within the framework of the project, another non-standard solution was used: Offshore transshipment complexes (IPC). These are transshipment points in Kamchatka and in. Murmansk Since LNG Northern Sea Route is delivered by ice-class gas carriers, their use in the southern latitudes is ineffective for the delivery of LNG to end consumers. Therefore, transshipment points were created, to which LNG is transported by ice-class gas carriers, and then by conventional gas carriers. This makes it possible to increase the volume of supplies due to the freight of conventional gas carriers, and to increase the volume of gas injection into floating gas storage facilities (UGS) at transshipment points, due to the shorter operation arm of ice-class gas carriers.
Russian technologies in the Arctic LNG project
In addition to non-standard technical solutions of the proposed TsSKMS, transshipment and construction points for ice-class gas carriers, other large Russian companies with serious scientific and technical potential take part in the Arctic-LNG project for 2023.
Rosatom specialists began testing pumps, expanders and compressors. The work is carried out on the basis of the Efremov Research Institute of Electrophysical Equipment (NIIEFA).
Engineers "Roskosmos presented solutions for heat exchangers. The company "Power machines supplied electric motors, which, in terms of their shunting characteristics, made it possible to replace complex and expensive imported turbines. Dozens of other Russian companies took part in the project, offering non-standard technological solutions.
The work of domestic enterprises is aimed at partial replacement of equipment and technologies of companies such as GTT, Baker Hughes, Schlumberger, Halliburton, Linde, Siemens and many others, who originally planned to participate in the Arctic LNG project, but left the Russian market after the outbreak of the conflict in Ukraine.
The complexity and uniqueness of the situation is that the group of Russian companies was able to reproduce the entire technological chain of LNG production using only domestic technologies and equipment. Of course, experts can argue for a long time about the effectiveness of such a decision, but something else is fundamentally important. The consortium of foreign companies actually had a monopoly on LNG production. This meant that no country in the world (except perhaps China) could replicate the entire cycle on its own.
In any LNG project in the world, the technologies of the companies mentioned above were presented in one way or another. This guaranteed TNK actual control over all global energy production and transportation projects.
History
2024
First LNG shipment to Asia
The Russian Arctic LNG 2, which is under sanctions from the United States and its allies, sent a shipment of gas to Asia for the first time in September 2024. Russia successfully finds customers who are ready to take fuel bypassing US restrictions.
Gas processing growth in defiance of U.S. containment efforts
In July 2024, the Russian Arctic LNG 2 project sharply increased refining volumes, preparing to begin exporting liquefied gas, contrary to attempts to contain by the United States.
The plant recycled about 28.7 million cubic meters in July. m of gas. This is 3.5 times more than in June, and the highest level in the last 3 months.
Although the data does not indicate that these volumes were liquefied, similar information on Novatek's Yamal LNG project suggests that this is the case.
The United States banned Korea from transferring gas carriers to Russia for the Arctic SPG-2
Although the representatives of the United States could not influence the work of the Arctic production lines directly SPG-2 by the spring of 2024 they managed to put pressure on their vassals in the person of manufacturers from South Korea. This led to the fact that almost finished gas carriers intended for the "Arctic-LNG" were blocked under a far-fetched pretext in Korean shipyards.
At the same time, Korean manufacturers incurred significant financial and reputational costs. Ships were designed for polar latitudes and therefore cannot be operated on other routes. Therefore, they are still detained in Korea indefinitely.
2023
Mitsui intends to withdraw all its employees from the project
Mitsui intends to withdraw all its employees from the Russian Arctic LNG - 2 project due to US sanctions, media sources said in December 2023.
This decision was made, among other things, to protect these people from the action of American restrictive measures, sources say. This decision, as noted, does not mean the withdrawal of the Japanese side from the project. We are talking about Mitsui employees sent to work in the Japan Arctic LNG consortium, through which, together with JOGMEC, the company has a 10% stake in the LNG project.
Novatek's foreign partners declare force majeure on participation in the project
According to media reports, in December 2023, foreign shareholders of the Arctic SPG-2 project - French TotalEnergies, Chinese CNPC and CNOOC and a consortium of Japanese Mitsui and JOGMEC - announced force majeure to participate in the project. This may lead to the fact that Arctic SPG-2 will lose long-term contracts for the export of LNG, and NOVATEK will independently finance the project.
US sanctions and threat to "cease the existence of the project"
On November 1, 2023, the United States imposed sanctions on the Arctic LNG 2 project of Novatek PJSC, whose investor is Japan.
U.S. sanctions on Russian LNG jeopardize Japan's energy security and its relationship with Western allies.
The United States is ensuring that the Russian Arctic LNG 2 project ceases to exist, said Assistant Secretary of State for power Jeffrey Payatt.
"We are doing everything we can to accelerate this trend by applying two mechanisms. First, we are accelerating the energy transition both in the United States and in the world. In addition, the United States is systematically working to reduce future revenues of the Russian Federation from energy exports. Our goal is to end this project. "
This statement, especially after sabotage on the Nord Stream gas pipelines, cannot be perceived otherwise as a direct threat involving the use of any means. And behind such statements by the United States are serious fears for the future of its monopoly on the LNG market precisely because of the Russian project in the Arctic. The harsh rhetoric of American officials regarding this project shows how much it is important for the energy security of the Russian Federation.
At this time, the global energy market is reformatting, the main beneficiaries of which are suppliers from the United States. To increase its share in the energy market, managed military conflicts, gas pipeline explosions, sanctions are used and social unrest is provoked in other large gas supplying countries.
The normal functioning of the economies of Asia, primarily China, India, Japan and South Korea, critically depends on uninterrupted energy supplies. The bottleneck in providing these countries with energy is the straits - Taiwan, Malaka, Hormuz, Suez and Panama. Shipping across all these straits has been in a state of intense uncertainty over the past two years.
Taiwan Strait - due to tensions between China and Taiwan.
Malaka Strait due to changes in the system of insurance of goods and ships. Many ships now go without insurance or with insurance outside Anglo-Saxon jurisdiction. This leads to an increase in piracy.
The problems of the Panama Canal and the vulnerability of infrastructure can also be used to strengthen the position of TNCs in the energy market. For example, the congestion of the Panama Canal, due to shallowing and lack of large-scale infrastructure investments, made deliveries to Asian countries from the Gulf of Mexico and the Caribbean region longer and more expensive. The vulnerability of infrastructure to hurricanes, droughts and extreme weather increases the likelihood of supply failures and, accordingly, the importance of 'reliable suppliers'.
Major American projects, such as the construction of Venture Global LNG Inc.'s Plaquemines plant in Louisiana, the expansion of Cheniere Energy Inc.'s plant in Corpus Christi (state) Texas and the construction of the Golden Pass plant in Texas with support, Qatar are expected to provide more than 70% of new LNG supplies. The commissioning of these enterprises is scheduled for the next year.
These projects are currently underinvested, as major players are in no hurry to invest in a volatile market. Increasing international tensions and maintaining the intensity of local conflicts will lead to stable high LNG prices, which will attract large investments to the US oil and gas sector.
The integrated approach of the United States to the consolidation of the energy market goes in several directions at once. First of all, the gas supply system through pipelines is destroyed, long-term pricing is violated, giving way to the stock exchange spot mechanism. Now the EU countries are trying to return to long-term contracts for the supply of LNG, but suppliers offer completely different conditions.
The technological gap is growing, as LNG production requires the use of modern technologies concentrated in the hands of TNK. LNG delivery requires special gas carriers, insurance and infrastructure to receive LNG. LNG receiving tanks, regasification units and pipelines are needed. All this is also high-tech equipment, the production of which requires not only money, but also relevant competencies, as well as access to technology. In general, such actions of TNK contribute to reducing the number of alternative LNG suppliers in the world, strengthening the position of a small group of companies in the market.
According to the White House Council of Economic Advisers, LNG exports from the United States to Europe in 2023 rose to 117.4 million cubic meters. m, which is almost 2.5 times higher than the previous year (47.8 million cubic meters m). Exports to China in 2022, on the contrary, decreased to 5.1 million cubic meters. m from 21.9 million cubic meters. m in 2021.
American companies seek a monopoly on the production and transportation of energy resources. In cases where independent players begin to threaten their monopoly position, a sanctions mechanism is used.
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