French oil and gas services provider Technip Energies expects the latest European sanctions against Russia to have a more direct impact on the execution of liquefied natural gas project Arctic LNG 2, it said on Monday, adding it was ramping up activity outside of Russia this year.
“These will naturally have a more direct impact on the future execution of the project”, Technip Energies’ Chief Executive Officer Arnaud Pieton said on a call, adding the sanctions could make the execution of the LNG project in the Russian Arctic “more complicated, maybe even highly complicated.”
The Arctic LNG 2 plant, located on the Gydan peninsula, was expected to start operations at its first of three lines in 2023, but this plan has been under threat following a raft of Western sanctions.
According to Pieton, sanctions could significantly reduce the involvement of Technip Energies in the project beyond the second quarter of this year.
Project delivery in the first quarter contributed 1.3 billion euros ($1.4 billion) in revenue, including 445.4 million euros from Arctic LNG 2.
Technip Energies, which specializes in engineering and technology for the energy industry, said in March it was renouncing new business opportunities in Russia and excluded ongoing Russian projects from its guidance.
Technip Energies also said rising demand for liquefied natural gas as Western buyers steer clear of Russian fuel was set to continue as the war had driven “an exceptional change” in the market outlook for LNG.
“The vast majority of Europe’s gas demand will, we think, have to come from LNG”, Pieton said, citing Technip Energies’ variety of low-carbon LNG solutions.
The group posted adjusted recurring earnings before interest and tax of 107.3 million euros, beating a company-supplied consensus analyst forecast of 100.9 million euros.