AsiaEuropeLNG Terminals

TotalEnergies issues force majeure over Novatek’s Arctic LNG 2 project

By LNG Prime Staff
TotalEnergies issues force majeure over Novatek's Arctic LNG 2 project
First GBS of Arctic LNG 2 project (Image: Novatek)

French energy giant TotalEnergies has initiated a force majeure process on the Novatek-operated Arctic LNG 2 project in Russia due to sanctions.

In November 2023, the US government issued new Russia-related sanctions due to the war in Ukraine, including for the Arctic 2 LNG project.

“We have initiated the force majeure process in accordance with existing contracts, and we will comply with applicable sanctions regimes in accordance with our principles of conduct,” a spokesman for TotalEnergies told LNG Prime on Wednesday via email.

“Consequently, no offtake of LNG from Arctic LNG 2 by TotalEnergies is planned in 2024,” he said.

In March 2022, TotalEnergies said it would no longer provide capital and book proven reserves for the Arctic LNG 2 project due to the uncertainty created by the technological and financial sanctions on the ability to carry out the development.

After that, TotalEnergies wrote down its 19.4 percent stake in Novatek and withdrew the representatives of the company from the board of Novatek

TotalEnergies holds a 10 percent stake in the 19.8 mtpa Arctic LNG 2 development, and a 20 percent in Novatek’s Yamal LNG project.

Arctic LNG 2

In August last year, Novatek completed the installation of the first gravity-based structure platform which will serve its Arctic LNG 2 project located on the Gydan peninsula.

According to reports in Russia, Novatek started production of LNG from this unit in December and expects to ship first cargoes soon.

However, the firm also issued force majeure on Arctic 2 LNG supplies to its customers due to US sanctions imposed on the project in November last year, the reports said.

The first GBS, or train, has a capacity of about 6.6 mtpa, such as the the two other units which are under construction.

The resource base of the Arctic LNG 2 project is the Utrenneye field located on the Gydan Peninsula in the YaNAO, about 70 km from Novatek’s Yamal LNG project across the Gulf of Ob.

Novatek is the LNG project’s operator with a 60 percent stake, TotalEnergies owns 10 percent, while CNPC and CNOOC of China have 10 percent, each.

Japan Arctic LNG, a consortium of Mitsui & Co and Jogmec, owns a 10 percent stake in the project as well.

Most Popular

Contracts and Tenders

Glencore pens Chinese LNG supply deal

Switzerland-based energy trader Glencore has signed a long-term deal to supply liquefied natural gas (LNG) to a unit of China Suntien Green Energy.
Contracts and Tenders

Equinor seals long-term LNG SPA with Thailand’s PTT

Norwegian energy firm Equinor has signed a long-term LNG sales and purchase agreement with a unit of Thailand’s PTT.
LNG Terminals

Atlantic LNG rates continue to increase

Atlantic spot LNG shipping rates rose for the third week in a row, rising $5,250 week-on-week to $25,250 per day, according to Spark Commodities.

More News Like This

Contracts and Tenders

TotalEnergies, GS Energy pen long-term LNG SPA

French energy giant TotalEnergies has entered into a long-term agreement with South Korea’s GS Energy to supply the latter with liquefied natural gas (LNG).
Contracts and Tenders

TotalEnergies and T&T join forces on LNG-to-power project in Vietnam

French energy giant TotalEnergies and Vietnamese conglomerate T&T have signed a memorandum of understanding to jointly develop the 1,500 MW Long Son LNG-to-power project in Vietnam.
Vessels

Arctic LNG 2 seeks $1 billion from Hanwha Ocean over terminated LNG carrier orders

Novatek-led Arctic LNG 2 is seeking approximately $1 billion in damages from South Korean shipbuilder Hanwha Ocean over terminated shipbuilding contracts for Arc7 ice-class LNG tankers.
LNG Terminals

TotalEnergies to transfer Papua LNG operatorship to ExxonMobil

French energy giant TotalEnergies said on Monday that Papua LNG has achieved "major" contractual and commercial milestones, marking "decisive" steps towards a final investment decision. These include completing the EPC tendering process and transferring Papua LNG operatorship to US energy giant ExxonMobil, operator of the PNG LNG project.