Despite the series of penalties, the Arctic LNG 2 project has seen the light of day, with the first production train operational. However, its performance has fallen short of the initial target. There are still many unknowns when it comes to future production goals.
In a report published on January 17, Novatek, a Russian gas company, estimates that it will have produced 645 million barrels (oil equivalent) in 2023, 0.9% more than in 2022, and states that its sales have increased by 2.7%. This increase is set to continue in 2024, as the Arctic LNG 2 project – launched in 2021 – is producing its first volumes of liquefied gas since the first liquefaction train came on stream on 21 December last year.
This new project came to a successful conclusion a year and a half late, despite the series of Western sanctions activated by the United States and Europe after the start of the armed conflict between Ukraine and Russia. This series of sanctions limited know-how, manpower, technology, investment and the supply of materials.
For example, TotalEnergies has gradually withdrawn – under pressure from the sanctions – from the various stages of the project in which it was involved, such as long-term gas purchase contracts. More recently, it has invoked a clause in the gas purchase contract, “force majeure”, to withdraw from the project, claiming that it no longer knows whether it is capable of honouring its commitments.
At fifty percent
However, the first train’s gas-to-liquefied gas conversion line is currently operating at only 50% of its initial capacity. This is because American and European sanctions have deprived the project of three of the seven LM 9000 turbines built by Baker Hughes. Boeing 777 turbines.
“The builders have reconfigured the platform using the four turbines initially delivered. Two are used to produce energy and the other two to compress gas,” explains Hervé Baudu, a lecturer at the École Nationale de Marine Marchande and an expert in polar maritime issues.
The aim of Arctic LNG 2 is to achieve annual production of 6.6 million tonnes per train. For the moment, Train 1 is capable of producing 3.3 million tonnes of gas. In the course of the year, they may be able to integrate Chinese CGT30 turbines from the manufacturer Harbin Guanghan, and improve production capacity,” says Hervé Baudu. “But they are less powerful, 30 MW compared with 75 MW.”
Trains no. 2 and no. 3 are scheduled for 2024 and 2026. The equipment for the German Siemens cryogenic chain has already been delivered and “all that’s missing is power generation,” he says. “For that, they’ll be able to call on around twenty generators. Some of them could be installed on land.”
Equipment maintenance is another unknown factor. “In 2022, some of the Yamal turbines were sent back to Canada, and they managed to repatriate them,” recalls Hervé Baudu. “Now it remains to be seen whether they will be able to call on local expertise.”
Routing gas
A third limitation remains: the availability of ice-breaking LNG tankers to export the cargo. Production of the 16 ice-breaking LNG tankers planned for Arctic LNG 2 was halted in the sixth quarter, after sanctions were imposed on the South Korean shipyards. “Of the ten tankers under construction at Russia’s Zvezda yard, only the first two have been completed, and the other three are still under construction, but it is not certain that they will be fitted with the tanks and propulsion originally planned,” says the expert. “Certainly it will be the tankers from the other Yamal LNG plant that will also be used to transport the LNG from Arctic LNG2”.
To compensate for the lack of nautical means, it is possible that a supply chain involving transhipment from an ice-breaking tanker to a conventional LNG carrier will be set up outside the ice limit. “Near Murmansk, in the shelter of Kildin Island, there are four lockers for mooring LNG tankers. A rotation takes 24 hours to load or unload”, explains Hervé Baudu.
In Europe, Belgium, Spain and France are the first to be supplied with Russian LNG. At Zeebrugge, the storage facilities allow for resale, and this speculation is causing concern. The alternative is LNG from across the Atlantic, some of which is produced from fracked gas.
The Arctic LNG 2 project is one of the “carbon bomb” oil projects, a concept developed by Leeds University geographer Kjell Kühne and his colleagues in an article published in Energy Policy July 2022. According to a survey published in Le Monde, it will consume over a billion tonnes of CO2 during its lifetime.
Camille Lin, PolarJournal
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