Technip Energies says to exit Arctic LNG 2 project in first half of 2023

Paris-based LNG engineering giant Technip Energies has signed a deal to exit Novatek’s Arctic LNG 2 project in Russia within the first half of 2023.

The Arctic LNG 2 project located on the Gydan peninsula includes the construction of three LNG trains with a capacity of 6.6 mtpa, each, using gravity-based structure platforms.

Novatek receives modules from China and installs them on the GBS at its construction yard in Belokamenka in Murmansk. The project’s contractors include Technip Energies, Saipem, and Nipigaz.

However, since the start of the Russia-Ukraine war in February and the introduction of Western sanctions on Russian firms, many companies are withdrawing from Russia.

Technip Energies said in July it continued to implement an “orderly exit” from the Arctic LNG 2 project, while Saipem is in talks to pull out of two EPC contracts related to the project.

“Our orderly exit from Arctic LNG 2 is progressing and all operational personnel have been demobilized from the project,” Arnaud Pieton, CEO of Technip Energies, said in the company’s January-September financial results announcement.

“We have signed an exit framework agreement with our customer, which we are currently implementing, and anticipate completing this process within the first half of 2023,” Pieton said.

Russian media reports previously said that Novatek intends to replace Technip Energies and Saipem with two new contractors.

These are Nova energies, controlled by Nipigaz, and Green Energy Solutions, registered in the UAE, the reports said.

Novatek is the LNG project’s operator with a 60 percent stake, France’s 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.

The Russian LNG producer previously expected to launch the first Arctic 2 LNG train in 2023, followed by the second and the third unit in 2024 and 2025, respectfully.

Novatek still expects to launch the first GBS by the end of 2023.

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