American engineers deal blow to Russian Arctic oligarch
U.S oil service company Baker Hughes will no longer provide engineering services to Russian LNG developers. That creates another serious headache for Novatek owner Leonid Mikhelson and his LNG projects in the Arctic.
Several of Russia’s main energy projects in the Arctic face more troubles as the U.S company reportedly has decided to halt all engineering services to Russian LNG companies. According to newspaper Kommersant, Baker Hughes will also stop deliveries of equipment to Russia.
Baker Hughes plays a key role in several of the new natural gas projects that over the past years have been developed in the Russian Arctic. Without the services and equipment provided by the company, projects like the Yamal LNG and the Arctic LNG 2 will soon run into trouble.
According to Kommersant, Novatek will not be able to get needed spare parts to the Yamal LNG, and the construction of the first train of the Arctic LNG 2 might not be completed. The former project was launched in 2017 and now produces about 20 million tons of LNG per year. The latter is to be launched in 2023 and by 2026 produce 19,8 million tons.
People associated with the Russian natural gas industry now question the future of all projects dependent of foreign equipment.
Novatek owner and CEO Leonid Mikhelson has previously stated that operations are “complicated” by international sanctions and that he no longer can confirm formerly adopted timelines for projects such as the Arctic LNG 2.
The first train of the grand LNG project was original due to come into production in 2023. The floating gravity structure that is built at the Belokamenka yard outside Murmansk is believed to 98 percent completed and the plan has been to tow it to the production site in Gydan in 2022.
However, without the services and equipment from Baker Hughes that is unlikely to happen. The U.S company delivers turbines to the project, and Novatek has reportedly installed only about half of the seven turbines needed.
On the 25th of May, a heavy loads ship delivered what is believed to have been the last major piece of western technology to the project.
The decision by Baker Hughes comes as a result of Russia’s bloody war against Ukraine. It complements the international sanctions regime introduced against the aggressor country.
The halt in services and equipment from Baker Hughes follow similar decisions from several more companies like Siemens and Linde.
