Omens of Decline for Russia’s Once World-Leading Energy Industry
It was to be a hugely ambitious project on the frigid Gulf of Ob, in Russia’s Far North, a steppingstone in Moscow’s rising ambitions to be a power in liquefied natural gas much as it is in oil and gas delivered by pipeline.
When President Vladimir V. Putin of Russia launched his war on Ukraine, the $21 billion project known as Arctic LNG 2 was well underway with dozens of wells drilled, an airport built and most of the equipment ordered.
Now, though, European Union sanctions that prohibit the sale of gas liquefaction equipment to Russia have thrown the giant complex into doubt. The sanctions mean, at best, that just one of three planned liquefaction facilities at Arctic LNG is likely to be completed anytime soon, analysts say.
Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.