Russia will launch Arctic LNG 2 project even if US sanctions scare off investors – Finance Ministry

The US bill introducing new sanctions against Russia aims to sabotage the Arctic LNG 2 project, according to Russian Finance Minister Anton Siluanov. But Moscow will launch the project even if it has to do it on its own, he added.

Earlier this week, US senators introduced a bill suggesting a wide range of sanctions against Moscow, targeting its foreign debt, banking sphere and energy sector, including liquefied natural gas (LNG) projects abroad.

The sanctions may target the massive Arctic LNG 2 project developed by Russia’s biggest privately owned natural gas producer Novatek. France’s Total has recently joined the project, while Chinese investors also show strong interest in it.

If the US proceeds with the punitive measures, it is unclear how foreign partners may react, Siluanov said. While Russia hopes that “business interests will prevail,” the country can turn the project into reality on its own, the minister stressed.

“In any case we will implement this Arctic LNG project because we have the resources,” Siluanov told Russian outlet Business FM. He added that the country may consider using public funds due to the growing capacity of Russia’s sovereign wealth fund, which is to surpass 7 percent of GDP this year.

The minister added that Novatek’s Yamal LNG plant in the Arctic, which recently reached full capacity, has already proven its high profit margins for investors.

Novatek’s second plant for liquefying gas in the region, Arctic LNG 2 on the Gydan Peninsula in Northern Siberia, is expected to start operations in 2022-2023. It will produce 19.8 million tons of LNG per year when at full capacity.

The project is estimated to cost up to $35 billion. Various foreign firms, such as Siemens, Italian companies Nuovo Pignone and Saipem, and Turkey’s Renaissance services have signed supply and construction contracts for the new facility.

The sanctions bill targeting Russia was earlier slammed by top Russian officials. Kremlin spokesman Dmitry Peskov said it was “bordering racketeering” and has nothing to do with international trading rules. Meanwhile, the Russian government warned that it is weighing up a proper response if the bill becomes law.

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