The largest producer of LNG containers refused to work with Russia

Yekaterina Maximova

"After an in-depth analysis of the European sanctions packages No. 8 and 9, in particular, prohibiting engineering services with Russian companies, the Group announces the termination of its activities in Russia.

From January 8, 2023, the contract with Zvezda will be suspended, and GTT's intervention on two of the most modern LNG carriers will be limited to ensuring the safety of projects and the integrity of technology in accordance with current international sanctions", - this is the quotation from GTT message. 

 GTT participates in Russia in the design of tanks for 15 icebreaking LNG tankers under construction by the Zvezda shipbuilding complex. The company clarifies that the order portfolio for LNG icebreakers by 2025 is less than 6%. 

"As of October 1, 2022, it remained to recognize revenue of 74 million euros for LNG icebreakers by 2025 and 12 million euros for GBSS by 2027", - GTT clarifies.

As Kommersant reminds, in March, the Financial Times reported that Russia's gas projects in the Arctic may be under threat due to the decision of foreign manufacturers of containers for gas transportation to cease cooperation with Russian companies against the background of sanctions. According to the publication, the departure of such a world leader as GTT should affect projects in the Arctic most of all.

Currently, Russia's Arctic projects include Yamal LNG in northwestern Siberia, which accounted for 5% of global LNG exports in 2020, Arctic LNG-2 worth about $23 billion (exports of raw materials under this project should begin in 2023), as well as Sakhalin-2".

As Alexey Belogoryev, Deputy Director for Energy at the Institute of Energy and Finance, recalled in an interview with Novye Izvestia, Russia is in second place after the United States in terms of the planned volume of commissioning of new LNG capacities. However, now all these plans are in limbo due to technological sanctions, due to which Russian companies have been cut off from Western technologies of large-capacity gas liquefaction. Most likely, this will lead to a delay in the implementation of most projects for 2-3 years.

"We are competitive in terms of gas resources and the cost of the LNG produced. The problem is precisely in liquefaction technologies. Let's hope it's solvable. Novatek, Gazprom, equipment manufacturers assure that import substitution is quite real. It's only a matter of time," Belogoryev clarified.