Does Russia have the capabilities to repair LNG plants?
Many Western energy companies have abandoned Russia, and the country will not be able to rely on foreign expertise for the maintenance of the Sakhalin-2 LNG plant. If the structure were to remain closed for a long time for the works, there would be global consequences
2023 will be an important and critical year for Sakhalin-2, the liquefied natural gas (LNG) export facility in Russia's Far East. In fact, for the first time since it came into operation – i.e. in 2009 -, the plant will have to carry out routine maintenance without being able to count on the help of foreign contractors, given that Western oil & gas service companies have left the country after the invasion of Ukraine.
SHELL'S EXIT
Dutch company Shell, once a maintenance partner of Sakhalin-2, exited all of its operations in Russia last year. His place was taken over by Novatek , a Russian company which deals with the marketing of LNG and which is developing its own gas liquefaction technology .
WILL RUSSIA KEEP THE TIME AT SAKHALIN-2?
Work on Sakhalin-2 will begin in July and should, in theory, last forty days. But LNG traders are worried: not being able to rely on foreign know-how , in fact, Russia may not be able to meet the deadlines. And if the plant were to remain closed much longer than expected, the operations of filling the gas storages in view of the next cold season – operations which usually take place in the summer – could become more difficult due to the lesser availability of fuel on the market, and consequently for the highest prices.
“COMPLICATED BEASTS”
Export plants – wrote Stephen Stapczynski, Bloomberg energy journalist – are "complicated beasts", made up of a large number of pipes, pumps and heat exchangers. Completing maintenance on schedule is a challenge for even the most experienced engineers; let alone the Russians, as the country has only recently begun to develop its own oil & gas technology industry.
WHO NEEDS RUSSIA'S LNG
Given its geographical proximity, Sakhalin-2 is a very important source of LNG for Japan: last quarter it alone accounted for 8 percent of its total fuel imports. The plant is increasingly important for China, moreover. Not to mention that, despite the intentions of detachment (not immediately, in reality, but within a few years), the European Union is also buying a lot of LNG from Russia: the volumes of liquefied gas trade are now significantly higher than in the previous pre-war , although far from those of pipeline imports, currently minimal.
As a result, if the global LNG market were to "shrink" due to a collapse in supply from long-maintenance Sakhalin-2, competition for supplies between Europe and Asia could intensify and push fuel prices higher.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/russia-gnl-sakhalin-2-manutenzione/ on Sun, 07 May 2023 05:45:53 +0000.