How Western Sanctions Are Strangling Putin’s Arctic Gas Ambitions – by Stephen Stapczynski (Bloomberg News – May 4, 2024)

(Bloomberg) — Russia’s fortress economy has proved remarkably resilient to an onslaught of Western sanctions. Two years after the Kremlin’s invasion of Ukraine, it continues to fund a costly war and to prop up President Vladimir Putin. But there’s at least one spot where the pain is very real.

The Novatek PJSC-led Arctic LNG 2 facility, on the icy Kara Sea, is a key part of Moscow’s plans to boost exports and replenish coffers. For months now, it has been ready to ship liquefied natural gas to new markets, alternatives to the once-lucrative European pipeline trade.

And yet, the vast new $25 billion operation is sitting virtually idle, the first piece of Russia’s energy production complex to be effectively curbed by US restrictions.

Russia has long sought to increase its share of the global LNG market, but the war and the subsequent sharp drop in overland exports to Europe have reinforced the importance of these ambitions. Moscow wants to expand LNG output three-fold by 2030, adding at least $35 billion in annual revenue.

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