China receives first LNG cargo from Russia’s sanction-hit Arctic project

The first liquefied natural gas (LNG) cargo of the year from Russia’s sanctioned Arctic LNG 2 plant has been discharged at China’s Beihai LNG terminal, Reuters reports.

The Buran gas carrier was loaded with LNG on December 25 at a Saam floating storage unit near the Russian port of Murmansk, which is used by the Arctic LNG 2 project, according to the data. The vessel delivered the cargo to China’s southwestern Guangxi region via the Suez Canal, a route Arctic LNG 2 ships have begun using after winter restrictions limited access to the Northern Sea Route along Russia’s Arctic coast.

Arctic LNG 2, 60% owned by Russia’s Novatek (NVTK.MM), was set to become one of the country’s largest LNG plants, with a target output of 19.8 million metric tons per year. However, US sanctions over the Ukraine conflict have clouded its prospects.

Novatek began production at Arctic LNG 2 in December 2023 but only started delivering cargoes to end-users—all of them in China—in August last year. According to LSEG, Arctic LNG 2 delivered 23 cargoes, or 1.3 million metric tons of LNG, last year from its storage facilities near Murmansk and the eastern Kamchatka Peninsula to Beihai LNG, the sole importer of the project’s output.

Separately, LSEG data showed on Monday that the first Russia-made Arc 7 ice-class gas carrier, Alexey Kosygin, has arrived at Arctic LNG 2 for loadings. Ice-class tankers are designed with double hulls and reinforced propellers to withstand the pressure of Arctic ice conditions.

By Vafa Guliyeva