Japanese government bank extends Arctic LNG 2 loan freeze

The loan agreement signed last November between the Russian natural gas project and the Japan Bank for International Cooperation (JBIC) is on hold, the public bank announced this week, reports the the wall street journal.

Supposed to finance up to 1.71 billion euros out of the nearly 20 billion euros needed for construction, the absence of a Japanese share puts the whole project even more at risk.

Arctic LNG 2 is the second major project aimed at supplying Europe and Asia with liquid natural gas transported from Siberia by tankers via the Northern Sea Route. After Russia launched the bloody war against Ukraine on February 24, Europe is no longer a willing market to buy new Russian gas.

In March, the Japanese bank temporarily suspended lending to Arctic LNG 2. The now-extended freeze is bad news for Novatek, which until recently had thousands of workers engaged in building Kola’s production facilities. Yard in Belokamenka, north of Murmansk. From the site, the production facilities would be towed to the Gydan Peninsula.

In May, the Barents Observer reported on the mass outflow of workers from Belokamenka, a yard that until recently had around 20,000 workers flown in, many of them from other regions and countries in Central Asia.

European engineers also left the yard, as did the “Princess Anastasia” – the cruise ferry used as a floating hotel in Belokamenka.

Last year, Novatek CEO Leonid Mikhelson said poor Russian technology was behind the delay in starting production of Yamal LNG’s Train 4 at Sabetta.

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He said: “The turboexpanders and compressors are completely new. Admittedly, our manufacturers and factories still have to learn how to make good products. We have claims against almost all fourth line equipment suppliers,” said Leonid Mikhelson.

Arctic LNG 2, located across Ob Bay from Yamal LNG, was originally scheduled to start in 2023. But schedules are now changing as foreign companies with technology and know-how leave Russia in droves.

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