Russia’s LNG program in the Arctic has become dependent on Turkey

The unprecedented industrialization of the Arctic that has unfolded in recent years along the shores of Russia’s remote Gulf of Ob is facing serious problems that are an extension of Russia’s war against Ukraine and the subsequent imposition of Western sanctions.

Novatek’s major liquefied natural gas projects in the region are heavily dependent on Western technology, and a complete halt in development now threatens the last project, Arctic LNG 2. Novatek will not be able to complete the project as planned after the withdrawal of Baker Hughes, as well as Saipem and Technip. But help may come from Putin’s close friend Turkey.

Karpowership, the Turkish manufacturer of so-called powerships, is said to be in talks with Novatek to build a 300-400 MW floating power station that can power the first of the project’s three trains. According to Kommersant, Novatek has no choice but to make a deal with the Turkish company. There are simply no other options available in the market.

The powership is believed to be able to replace the turbines originally to be delivered by Baker Hughes. The American company was to build 20 LM9000 turbines on Arctic LNG 2, seven of which will be applied to the first train of the project. Only four of the turbines were delivered before sanctions hit and Baker Hughes pulled out of Russia. The last of these was sent to Belokamenka outside Murmansk on 25 May.

The four turbines to be delivered will be used for the gas liquefaction process, while power generation from Karpowership will produce the required energy, Kommersant reports.

Karpowership has built since 2010 25 powerships that today provide energy to countries with underdeveloped energy systems. Ships of this type currently operate in 10 African countries, as well as in the Middle East and Latin America. Electric ships are floating power plants mounted on barges or ships and can run on heavy fuel oil, diesel fuel or natural gas.

Novatek is also facing serious difficulties with LNG technology.

Key components are designed by the French company Technip. Another key partner was Saren BV, a joint venture of Italian engineering company Saipem and Turkish company Renaissance Heavy Industries. Both Technip and Saipem have now pulled out of Arctic LNG 2, and Novatek has replaced them with Nova Energies and Green Energy Solutions, Kommersant reports. The first company is a subsidiary of Russia’s Nipigaz, while the second is said to be a brand new company registered in the United Arab Emirates.

Also, Chinese shipyards that manufacture important components have decided to stop working with Novatek.

The consequences could be dramatic for places like Murmansk, where Novatek is building the massive structures. The Belokamenka field could eventually turn into a ghost town if the massive Arctic LNG 2 project comes to a complete halt.

Petros Kranias