U.S. sanctions ruin Kremlin's grand energy project - Bloomberg
The United States has destroyed the Kremlin's energy project (Photo: Getty Images)
Attempts by the United States to limit Russia's revenue from energy resources are starting to bear fruit. White House sanctions on the new liquefied natural gas (LNG) plant in Siberia have disrupted plans to begin exports, according to Bloomberg.
As noted in the agency, the operator Novatek has been desperately trying to find buyers since sanctions were imposed in November, and the first shipment is now delayed until at least February.
Foreign partners in the Arctic LNG 2 project, including the French company TotalEnergies and Chinese oil companies, have declared force majeure circumstances for their participation. Long-time clients who signed up for deliveries now don't want them, fearing U.S. retaliation.
International sanctions against the Russian oil industry have led to the Kremlin assembling a huge shadow fleet of tankers to ensure oil supplies. Still, with gas, it's not so straightforward, according to Bloomberg.
This is a small market with a limited number of specialized vessels that are carefully monitored and controlled. Arctic LNG 2 was supposed to use ships capable of crossing ice-covered waters above the Arctic Circle.
Bloomberg notes that the project, which began producing fuel in December, will likely find a buyer for its first batch. However, securing a stable business or operating at the planned capacity may be difficult.
Until recently, Russia could continue to build new LNG production plants and service existing ones despite the network of sanctions. Companies could receive components from China and the Middle East to replace Western supplies.
The U.S. and its allies have not taken action against LNG terminals that already export fuel to Europe and Asia. Therefore, efforts to strengthen the Arctic project are aimed at stopping Russia's plans for expansion.
This project is crucial to the Kremlin's program to triple LNG production by the decade's end and find buyers beyond Europe.
"Those grand plans now face serious blowback thanks to policymakers' efforts in Washington," according to Bloomberg.
U.S. sanctions on Arctic LNG 2
U.S. sanctions against Arctic LNG 2
On November 2, the Arctic LNG 2 project was included in the U.S. sanctions list regarding Russia's production and export capabilities in the energy sector.
U.S. Assistant Secretary of State for Energy Resources Jeffrey Pyatt stated that Washington aims to "choke off" this project in Russia.
