Japan-based Mitsui has decided to withdraw its employees from the Arctic LNG 2 project in Russia, reported Reuters citing a report by Sankei newspaper.
This move comes amidst growing challenges for the project, including US sanctions and the potential for additional restrictions from the European Union.
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The Arctic LNG 2 project, situated on the Gydan Peninsula, is crucial for Russia’s ambition to increase its share in the global liquified natural gas (LNG) market from 8% to 20% by 2030.
It also forms a part of the broader Russia-China ‘no limits’ partnership, which has seen Russia pivot its energy exports from Europe to Asia in response to Western sanctions linked to the conflict in Ukraine.
Despite Mitsui’s withdrawal of personnel, the joint venture between Mitsui and Japan Oil, Gas and Metals National Corporation (JOGMEC) is expected to retain its stake in the project.
Mitsui refrained from commenting on the situation while JOGMEC was not available for immediate response to Reuters’ queries.
Arctic LNG 2 has already encountered difficulties due to US sanctions and a shortage of gas carriers.
The sanctions have led to foreign shareholders suspending their participation, stepping back from financing responsibilities and offtake contracts for the plant.
China National Offshore Oil Corporation and China National Petroleum Corporation each hold a 10% stake in Arctic LNG 2, with Novatek, Russia’s top LNG producer, controlling a 60% share.
France’s TotalEnergies and a consortium comprising Mitsui and JOGMEC also each own a 10% stake.
The project, with a planned capacity of 19.8 million tonnes per annum of LNG, was initially set to dispatch its first LNG tankers in early 2024.
However, industry sources now anticipate that commercial LNG supplies from Arctic LNG 2 will not commence until at least the second quarter of 2024.
