The White House is causing problems for the Arctic LNG 2 project, casting doubt on Moscow’s grand plans for expansion.

US efforts to crimp Russia’s energy revenue are starting to have an impact.
White House sanctions on a new liquefied natural gas plant in Siberia have upended plans to start exports this month.
Operator Novatek PJSC has struggled to find buyers since the penalties were imposed in November, and the maiden voyage is now delayed until at least February.
Foreign partners in the Arctic LNG 2 project, including France’s TotalEnergies SE and Chinese oil firms, have declared force majeure on their participation. Long-term customers that signed up for supplies now don’t want them for fear of US retaliation.
International sanctions against Russia’s oil industry saw the Kremlin assemble a vast shadow fleet of tankers to keep crude moving, but it’s not so easy with gas.
It’s a smaller market with a limited number of specialized ships, which are closely tracked and monitored. And Arctic LNG 2 must use vessels that can traverse the ice-crusted waters above the Arctic Circle.
The project — which began producing fuel in December — is likely to find a buyer for its first shipment eventually. But it’ll probably struggle to secure stable business or operate at its intended capacity.
Until recently, Russia was able to continue building new LNG plants and servicing existing ones despite a web of sanctions. Facilities were able to source parts from China and the Middle East to replace Western supplies.
The US and its allies stopped short of slapping measures on LNG terminals that already export fuel to Europe and Asia. So the move to hone in on the Arctic venture appears intended to halt Russia’s expansion plans.
The project is a critical part of the Kremlin’s program to more than triple LNG production by the end of the decade and find buyers outside Europe.
Those grand plans now face serious blowback thanks to the efforts of policymakers in Washington.
–Stephen Stapczynski, Bloomberg News
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