Chinese engineering company Wison New Energies has decided to discontinue all ongoing Russian projects and will immediately and indefinitely stop taking any new Russian business, dealing a blow to the Arctic LNG 2 project.
"In view of the strategic future of the company, we have to make this difficult decision," the company said in a post on LinkedIn.
The Arctic LNG 2 had planned to build a gas turbine power station for the plant using equipment from Wison and Harbin Guanghan Gas Turbine Co. Ltd.
The withdrawal of the Chinese company is the latest setback for the Arctic LNG 2 project of Russia's top LNG exporter Novatek.
Located in the Gydan Peninsula in the Arctic, the Arctic LNG 2 project has been considered key to Russia's efforts to boost its global LNG market share from 8% to 20% by 2030-2035.
Foreign shareholders suspended participation in the Arctic LNG 2 project after the Biden Administration announced new sanctions in November 2023, effectively withdrawing from the financing of the project and for offtake contracts for the new plant.
In November, the U.S. Department of State designated limited liability company ARCTIC LNG 2, the operator of the Arctic LNG 2 Project, as part of additional sanctions against Russia "to further target individuals and entities associated with Russia's war effort and other malign activities."
The U.S. sanctions on Arctic LNG 2 have upended Novatek's plans for production start-up and export timelines.
Earlier this year, Reuters reported exclusively that Novatek is forced to scale back what would have been the biggest Russian export plant, Arctic LNG 2, as Western sanctions are constraining the company's access to ice-class LNG tankers.
Russia's LNG also became the target of the first EU sanctions on Russian gas. The European Union is set to ban the re-export of Russian LNG in the bloc's waters in a first sanctions measure targeting Russia's gas which was agreed this week.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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