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Putin Halts Arctic Gas Production as Sanctions Take Effect
Russia has been compelled to halt operations at a section of the world’s largest liquefied natural gas (LNG) facility near the Arctic city of Murmansk due to diminished demand caused by Western sanctions.
The Belokamenka yard, which was completed last year and was planned to employ 15,000 workers, is now abandoned, as most contractors have vacated the site.
This shutdown represents a significant setback for Russian President Vladimir Putin. Last year, Putin visited the facility alongside Leonid Mikhelson, the CEO of Novatek—the second-largest gas company in Russia responsible for constructing the plant.
In the previous year, Novatek produced 79 billion cubic meters of gas, approximately matching the United Kingdom’s entire annual consumption.
During their visit, both Putin and Mikhelson touted Belokamenka as a leading global industrial site. However, just a few months later, the US Treasury imposed sanctions on the Arctic LNG 2 project, with the European Union following suit with similar measures.
The imposition of sanctions has led to a shortage of available ships. Novatek required a fleet of ice-breaking LNG carriers for their project to proceed, but only a few shipyards were willing to risk violating sanctions. In September, construction firm Vellestroy reportedly pulled out of Belokamenka, and contractors Renkons Arktik have now also departed.
Currently, approximately 500 individuals remain on the site, primarily security personnel. A significant setback to Putin’s ambitions in the Arctic occurred in September when India declared it would no longer purchase LNG from Arctic LNG 2.
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