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NIEUWS NOUVELLES NEWS |
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Novatek Still Plans LNG Expansion Despite Sanctions
US sanctions in response to Russia's war against Ukraine have made life complicated for Novatek, and because of this it no longer sets firm growth targets. But the Russian LNG exporter is not throwing in the towel and will keep building LNG plants to meet growing global demand, Mikhelson told the Verona Eurasian Economic Forum in the United Arab Emirates. Global LNG demand is forecast to reach 920 million tons per year by 2040, up from the current level of around 400 million tons/yr, he was quoted as saying.And without Russia, the world will be unable to proceed with the energy transition and will face a supply crisis, he said.US sanctions have already stymied the Novatek-controlled Arctic LNG 2 project, which started operations at the end of last year but subsequently suspended them because it was unable to sell blacklisted LNG cargoes.Other new projects planned by Novatek have also been blacklisted by the US, as has state-run Gazprom's Ust-Luga LNG plant, now under construction, and privately owned A-Property's Yakutia LNG scheme, which is currently in the design stage.The US has made clear that it will blacklist all new LNG projects in Russia as long as the war in Ukraine continues.
Growing global competition among suppliers from 2027-28 and rising development costs will work against Russian LNG projects, but this will be offset by the potential for strong demand from developing countries, Illeritsky said. Addressing the same webinar, Alexander Klimentyev, vice president of Russia's national LNG association, said the biggest problem for Russian suppliers will be finding willing buyers, given the current geopolitical reality. Europe cannot be regarded as a long-term market for Russian LNG, as politics will trump the advantage of lower-cost imports from Russia, he said. Furthermore, the example of Arctic LNG 2 shows that even "friendly" countries such as China and India can be reluctant to buy even discounted volumes from blacklisted Russian projects for fear of being hit by secondary sanctions, Klimentyev added. Source : Energy Intelligence
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