Russian gas producer Novatek plans to place an order for a floating power plant from Turkish firm Karpowership for the first line of the country’s massive Arctic LNG 2 project, a report said Wednesday.
The search for an alternative supplier comes after U.S. energy services firm Baker Hughes reportedly ceased providing all services to Russian liquefied natural gas (LNG) projects in June amid a raft of Western sanctions, introduced since February over Moscow’s invasion of Ukraine.
Baker Hughes is said to have refused to provide gas turbines needed for gas liquefaction and electricity supply for the lines of the Novatek-led LNG development project in the Russian Arctic.
The Moscow-listed gas producer now looks to have electricity for the first line of the Arctic LNG 2 project provided by a 300-400 megawatts (MW) floating power plant it looks to buy from Karpowership, the Kommersant newspaper said, citing sources.
Before the Ukraine conflict, the $21 billion project was expected to be launched in 2023 and reach a full production capacity of almost 20 million tons of LNG a year in 2026.
The chief executive of Novatek said in June the company aimed to start the first line of its Arctic LNG 2 plant located on the Gydan peninsula in 2023.
Arctic LNG 2 has three operational lines with an annual capacity of 6.6 million tons of LNG each.
It is not yet clear when Karpowership, which supplies ship-mounted gas-fired power plants, could supply the floating power plant, the Kommersant cited sources as saying. They also said the method was likely to be applied to the second and third lines of the project as well.
Karpowership, owned by Karadeniz Holding, is one of the world’s largest operators of floating power plants. It owns and operates a fleet of around 20 ships that supply power to multiple countries, including Lebanon, Sierra Leone, Gambia, Mozambique, Ghana and Indonesia.
Arctic LNG 2 has been seen as a key for Russia’s plans to raise its share on global LNG market to a fifth by 2035, expanding its annual LNG output to 120 million-140 million tons from around 30 million tons now.
Analysts have said Russia will need to rethink its aim after Western sanctions targeted equipment it needs to expand production.
Novatek holds a 60% stake in the project, while 10% stakes are held by France’s TotalEnergies, Japan Arctic LNG (a consortium of Mitsui & Co. and JOGMEC), and Chinese firms CNPC and CNOOC.