Russian President Vladimir Putin approved Arctic LNG 2's first line departure via the Northern Sea Route from the Murmansk region to its future production site on the Gydan peninsula, the Kremlin said on Thursday.
Putin, the ultimate decision-maker in Russia, pays special attention to energy projects in the country. Russia heavily relies on oil and gas production, while Moscow is focusing on developing its own know-how at a time of Western sanctions.
The Murmansk region hosts the world's first facility for mass producing natural gas liquefaction trains on gravity-based structures (GBS), which will be used in Arctic LNG 2.
Arctic LNG 2 would be Russia's third large-scale project for producing liquefied natural gas (LNG) after a Gazprom (GAZP.MM)-led Sakhalin 2 plant in Russia's Pacific and Yamal LNG controlled by Novatek (NVTK.MM).
It would help Russia achieve its goal of gaining 20% of the global LNG market by 2035 from around 8% currently.
"LNG projects are very important. They allow us to conquer share on global LNG market, to develop related sectors... There are reasons to believe that Arctic LNG 2 will be implemented on time," Putin said in televised comments.
Novatek, with a 60% stake, leads Arctic LNG 2, which is expected to start producing the super-cooled gas at the end of this year or in early 2024 at its first technological line.
Arctic LNG 2's three lines will have production capacity of 6.6 million tonnes of LNG per year each. Investments in the project are estimated at $21.3 billion.
Other shareholders of Arctic LNG 2 are French energy major TotalEnergies (TTEF.PA) (10%), China's CNPC (10%) and CNOOC (0883.HK) (10%), as well as Japan Arctic LNG (10%), a consortium of Mitsui & Co, Ltd. (8031.T) and JOGMEC.
