Italy's Saipem Completes Exit from Russia's Arctic-2 LNG Project

(Reuters) — Italian energy engineering and construction group Saipem is no longer involved in Arctic-2 LNG, a massive Russian project to build an LNG production site in the Arctic, which was targeted by U.S. sanctions last month.

Responding to a Reuters' request for information, Saipem said it had completed the exit from the project it entered in 2018, adding the backlog for contracts related to Arctic-2 LNG was down to zero.

"The only remaining activities in progress involve the closing of accounting with suppliers and the definition of commercial agreements with the client for activities performed before the entry into force of the sanctions, which are currently being finalized," the Italian group wrote in an emailed message.

In 2019 Saipem entered into a joint venture for the formation of Arctic-2 LNG, after announcing in 2018 a contract to design and build offshore platforms on which Arctic-2's LNG trains would be installed.

At that time, Saipem said it had been assigned a share of the project worth approximately 2.2 billion euros.

In early November the United States imposed new sanctions on Russia over the war in Ukraine, targeting among others the limited liability company Arctic LNG 2, a major entity involved in the development, operation and ownership of the project.

Saipem said it did not foresee any write-downs due to the effects of last month's sanctions.

The project is led by Russian firm Novatek which holds a 60% stake, with other shareholders, including French energy major TotalEnergies, holding minority stakes.

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