Russia's Novatek Issues Force Majeure Notices Over Arctic LNG 2 Project

(Reuters) — Novatek, Russia's largest producer of liquefied natural gas (LNG), has sent force majeure notifications to some of its clients over future supplies from its Arctic LNG 2 project, four industry sources told Reuters on Thursday.

Novatek declined to immediately comment on the situation.

The notifications were issued after the United States last month imposed sanctions on Arctic LNG 2, which is due to start production before the end of this year or in early 2024.

Arctic LNG 2's designed capacity, with three trains, is 19.8 million metric tons per year and 1.6 million tons per year of stable gas condensate.

The project is a key element of Russia's drive to increase its market share on the global LNG market to a fifth by 2030 - from around 8% now. The first LNG tankers from the project were expected to set sail in the first quarter of next year.

One of the sources said that clients who had contracted to buy the LNG, such as China's Shenergy Group and Zheijang Energy and Spain's Repsol, had received force majeure notifications.

Repsol, which signed heads of agreement with Novatek on LNG supplies from Arctic LNG 2 and other projects in 2019, said it did not have a firm gas supply contract and the company had not received any force majeure notification.

Shenergy Group and Zheijang Energy were not immediately available for comment outside of business hours.

A seller of goods or services may declare force majeure in the event that they cannot supply them due to circumstances beyond their control. In such a case, they must notify the other party and offer an explanation.

Related News


{{ error }}
{{ comment.comment.Name }} • {{ comment.timeAgo }}
{{ comment.comment.Text }}