Saipem Enters Negotiations to End Arctic LNG 2 Project Contracts

(Reuters) — Saipem is in talks to end two contracts related to Russia's $21-billion Arctic LNG 2 project led by Moscow-listed gas producer Novatek, the Italian energy services group said in its interim financial statement.

Saipem said its backlog in Russia amounted to approximately 1.4 billion euros ($1.43 billion) and consisted only of these two projects related to the building of an LNG project in the Arctic.

Saipem entered one of these contracts in joint-venture with Turkey's Ronesans and the second with France's Technip TE.PA.

Technip said at the end of July it was seeking an "orderly exit" from the Arctic LNG 2 project. 

Before the Ukraine conflict, Arctic LNG 2 was expected to be launched in 2023 and reach full production capacity of almost 20 million tonnes of LNG a year in 2026.

The chief executive of Novatek said in June the company aimed to start the first line of its Arctic LNG 2 project in 2023. 

Russia has increased pressure on investors in its two Pacific energy projects which once helped Moscow rebuild its economy, blaming Exxon Mobil for falling oil output at Sakhalin-1 and giving shareholders of Sakhalin-2 a month to claim their stakes. 

($1 = 0.9809 euros)

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