Despite restrictions, Italian companies supplied components worth €134 million to Moscow for the “Arctic LNG 2” project. The shipments involved companies like Nuovo Pignone, Tenaris, Marcegaglia, as well as two state-owned enterprises, using intermediaries in the United Arab Emirates and China. This was uncovered in an investigation by the publication *Domani*, conducted in collaboration with the Arctic-focused NGO “Arctida.”
All companies involved in these shipments are registered in Italy. Some are state-controlled, while others are foreign-owned. In most cases, the goods were not shipped directly but through intermediary companies, primarily based in China, the United Arab Emirates, and Turkey—countries that have not imposed sanctions on Moscow following the invasion of Ukraine. Investigators noted that two of these intermediary firms, registered in the UAE and involved in multiple transit schemes, have direct connections to Russia.
Investigators traced the following scheme: Italian companies sold goods to firms not registered in Russia, which then transferred the products to the Arctic. Individuals from the Russian industrial sector, as well as Gennady Timchenko, a close associate of Putin, were involved in these firms’ activities. Formally, this arrangement complied with sanction requirements. The majority of components from Italy were supplied by Nuovo Pignone, a Florence-based firm owned by the American company Baker Hughes, specializing in gas turbine manufacturing.
“Arctic LNG 2” is NOVATEK’s second major LNG export project, following the “Yamal LNG” plant launched in 2017, which has a capacity of 16.5 million tons per year. The project is located near the northwestern coast of the Gydan Peninsula in the Tazovsky District of Yamal. “Arctic LNG 2” involves the construction of three production lines for liquefied natural gas, each with a capacity of 6.6 million tons per year. Altogether, the three lines are expected to produce 19.8 million tons of LNG and up to 1.6 million tons of stabilized gas condensate annually. Due to sanctions, “Arctic LNG 2” was unable to begin exporting gas from its first production line, which was scheduled to start earlier this year.
The U.S. imposed sanctions on LLC “Arctic LNG 2” in November 2023, which significantly complicated the project’s operations. Three LNG carriers built by Hanwha Ocean—Zhores Alferov, Lev Landau, and Pyotr Kapitsa—have yet to reach the project. Another three vessels are still under construction.
The “Arctic LNG 2” project, valued at over $21 billion, involves several stakeholders: NOVATEK (60%), France’s Total Energies, China’s CNPC and CNOOC, and a consortium of Japanese companies Mitsui and JOGMEC (each holding a 10% stake). LNG shipments from the project’s first production line were initially planned for December 2023 to early 2024. The second line was expected to start in 2024, with the third line slated for 2026.
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