NOVATEK, amid sanctions restrictions, has begun to revise plans for the construction of its promising large-scale LNG projects in Murmansk and Sabetta. Work on Murmansk LNG and Ob LNG has been frozen for now. The development of the Ob Gas Chemical Complex (GCC) continues, but with the possibility of repurposing the project for the production of ammonia and urea. Experts believe that repurposing is logical due to the poor availability of technologies for the original version of the project and more convenient marketing of urea.

Due to the pressure of sanctions, the leader of the Russian LNG market, NOVATEK, is looking for alternative options for monetizing its gas reserves and revising promising export projects.

According to sources, further development of the large-scale projects Murmansk LNG and Ob LNG has been suspended for now; active work is not underway on either of them.

Kommersant’s sources have no idea when NOVATEK will return to their development, since the company is currently mainly focused on completing Arctic LNG 2 and establishing shipments from the project. According to Kommersant’s sources, the company understands that all future LNG export projects will be subject to sanctions. It is also unclear on which site to build ice-class tankers for Arctic projects, how to finance them, and how to organize trading.

Murmansk LNG, consisting of three lines of 6.8 million tons, and Ob LNG with a capacity of 6 million tons were supposed to be NOVATEK’s next projects after Arctic LNG 2. Ob LNG was supposed to be implemented in Sabetta together with the Ob Gas Chemical Plant. According to the latest public statements by NOVATEK CEO Leonid Mikhelson, the company planned to make mandatory investment decisions on Murmansk LNG and Ob LNG this year. According to him, the Ob GCC project was sent for redesign (the FEED stage had already been completed), since the company wanted to stop using European equipment.

On June 24, the EU banned new investments, as well as the provision of goods, technologies, and services necessary to complete the construction of Murmansk LNG and Ob LNG. Due to the total US sanctions, NOVATEK's Arctic LNG 2 project, where the first line has already been launched and the second is being prepared for installation, is experiencing difficulties with the shipment of raw materials. As RBC wrote, the company plans to postpone the launch of the plant's third line from 2026 to 2028.

Murmansk LNG was considered the company's most promising project, especially in the context of sanctions.

The location in the ice-free port of Murmansk eliminated the need to build tankers with an increased ice class Arc7 and made it possible to export LNG on conventional conventional vessels or sell it on FOB terms, when the buyer provides a tanker for export. The second factor is power supply from the energy-efficient Kola NPP (1.76 GW) of Rosatom using electric drives instead of foreign gas turbine equipment currently unavailable in the Russian Federation. The project implementation period was announced for 2027-2029. Until recently, NOVATEK was actively developing the project. For example, it has already received permission to export LNG from Murmansk LNG without reference to the field - NOVATEK will take gas for this project from Gazprom's UGSS. But there is still uncertainty about the construction of the 1.3 thousand km Volkhov-Murmansk-Belokamenka gas pipeline branch, which was planned to be built to supply gas to the Murmansk LNG. The government allowed NOVATEK to build a gas pipeline with a capacity of 41 billion cubic meters (about 30 billion cubic meters were intended for the LNG plant, 10 billion for the gasification of Murmansk and Karelia) independently, and then sell it in installments to Gazprom. But, according to Kommersant's sources, work on the construction of the pipeline has also been suspended.

Geoffrey Pyatt, US Assistant Secretary of State for Energy, in an interview with the FT on April 9:

"Our goal is to ensure that Arctic LNG 2 definitely kicks the bucket. We are determined to make sure that Russia is not able to implement new LNG projects."

Probably the most sensitive sanctions for Russia this year concern the inclusion of the Chinese company Penglai Jutal Offshore Engineering (PJOE) in the SDN list, believes Viktor Katona from Kpler. It was the first of the Chinese manufacturers of modules for the Arctic LNG-2 process lines to fall under sanctions, and it was after this that other companies from the PRC, for example Wison, refused to supply modules to the Russian Federation (see Kommersant of June 21). According to Mr. Katona, contracting technology and production does not seem to be an insurmountable obstacle, but it is necessary to ensure that the counterparty does not fall under US sanctions.