According to the newspaper, the U.S. Department of State shares a strong interest in degrading Russia’s status as a leading energy supplier over time.
U.S. sanctions against Russia's Arctic LNG 2 project are directly targeting Russia’s ability to export liquefied natural gas for the first time, in a move that could cause disruptions in global energy markets, the Financial Times reports.
The publication notes that until recently Washington has avoided increasing pressure on European countries facing an energy crisis.
However, the new move by the U.S. authorities would in effect block the project for western buyers, Shaistah Akhtar, a partner and sanctions specialist at law firm Mishcon de Reya, said. Energy Aspects, a consultancy, told the Financial Times that Washington's actions will tighten the market.
Anne-Sophie Corbeau, gas specialist at Columbia University’s School of International and Public Affairs, said that if Arctic LNG 2 does not start exporting as planned in 2024, it “will keep the markets a bit tighter for longer”.
At the same time, Kaushal Ramesh, head of LNG analytics at Rystad Energy, did not rule out that Western investors “could possibly apply for exemptions with phase down dates”. This could allow some LNG to flow from the project to western-allied markets, in a similar way to how Japan had earlier done to import Russian crude oil from the Sakhalin 2 project above the price cap.
The U.S. imposed sanctions on Russia's Arctic LNG 2 project on 2 November. The Office of Foreign Assets Control, part of the U.S. Treasury Department, also issued a general license that authorises the wind down of transactions involving Arctic LNG 2 through 31 January 2024. In turn, NOVATEK’s chief executive said at the Verona Eurasian Economic Forum that the U.S. sanctions on Arctic LNG 2 are a sign of his company's professionalism.
Arctic LNG 2 is the second LNG production-related project of NOVATEK. The project includes the construction of three LNG trains, with a capacity of 6.6 mtpa of LNG each. The total LNG capacity of the three trains will be 19.8 mtpa and about 1.6 mtpa of stable gas condensate. The Utrenneye field is the resource base for Arctic LNG 2. The field is located in the Gydan Peninsula in the Yamalo-Nenets Autonomous Okrug. The first, second and third trains are due to start operations in 2023, 2024 and 2026 respectively.