Amid the news of Trump's inauguration and the subsequent statements from the new U.S. President, some curious developments in the LNG market have almost gone unnoticed. The topic is gaining more relevance, as the U.S. is at the height of interest in LNG, and Trump demonstrates attention to the natural resources of Canada and Greenland. Russian companies seem to react promptly and adapt to the changing conditions. Such is the case with Novatek's previously postponed project, Murmansk LNG.
During the autumn of 2024, Novatek, while anticipating continued sanctions pressure against its most promising project, Arctic LNG 2, also prepared to halt two other LNG projects: Murmansk LNG and Obsky LNG, with a possible reprofiling of Obsky LNG towards producing ammonia and urea instead of blue hydrogen.
At that time, the future of Murmansk LNG was uncertain, even compared to the Obsky project; however, this appears to be changing now. Novatek has announced that the construction of the terminal for the Murmansk LNG project will take three years less!
This is particularly interesting as practically nothing has changed regarding the sanctions against the company. Moreover, with the recent update of the U.S. sanctions list against Russia's energy sector, some ship-operating Chinese and Indian companies allegedly working with Novatek have also been sanctioned.
The Chinese Ministry of Foreign Affairs promptly responded to the sanctions against its Zhoushan Wison Offshore and Marine Co Ltd. and Hongkong Yaqing Shipping Co Limited, denouncing the U.S. attempts to 'undermine national security and limit international cooperation in the area of trade'.
The expected cargo turnover of the terminal in the Murmansk region is estimated at 13.6 million tonnes per annum, with two planned gravity-based structures, each producing 6.8 million tonnes.
Russian experts also suggest that the situation with LNG exports isn't as dire as it may seem from the news. Oleg Kuzmichev, a private investor, proposed a hypothesis that spot prices of LNG may indicate that the gas has actually reached China. The same doubt is expressed by the expert channel Captain Arctic.
Novatek has recently published its production statistics for 2024: although the growth rate for natural gas isn't significant (a 2.1 per cent rise from 82.39 to 84.08 million cubic metres), liquid hydrocarbons have seen an improvement of 11.5 per cent, increasing from 12.37 million tonnes per annum to 13.79.
In general, the stocks of the company are evaluated rather positively among private investors (for example). Another contributing factor to the positive expectations is the promised launch of five LNG tankers from the Zvezda shipyard. In December, according to officials, they were 90 per cent ready.
The Editorial Board of the Arctic Century
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