Chinese engineering firm Wison New Energies has decided to discontinue all of its ongoing Russian projects, and will immediately and indefinitely stop taking any new Russian business, the company said in a LinkedIn post.
The move will impact the sanctioned Arctic LNG 2 project by Russia’s Novatek, which had said last year it planned to build a gas turbine power station for the liquefied natural gas plant using equipment from Wison and Harbin Guanghan Gas Turbine Co. Ltd.
“We appreciate the good relations we have built with our Russian partners in the past and value the work we have done together,” Wison said in its post.
“However, in view of the strategic future of the company, we have to make this difficult decision.”
Wison did not immediately respond to a Reuters request for comment.
Novatek is Russia’s largest LNG producer, and its Arctic LNG 2 plant in the Gydan peninsular had been due to become Russia’s largest such plant with eventual output of 19.8 million metric tons per year of LNG and 1.6 million tons per year of stable gas condensate from three trains.
Commercial deliveries were intended to begin in the first quarter of this year, after production began at Arctic LNG 2’s first train in December.
But plans were complicated last year when it was included in Western sanctions over Russia’s conflict in Ukraine, prompting foreign shareholders to freeze participation and Novatek to issue a force majeure. Novatek also suspended production due to the sanctions and a shortage of gas tankers.
Wison’s announcement comes after Russian President Vladimir Putin visited Beijing in May, during which he met his Chinese counterpart Xi Jinping. The two leaders pledged a “new era” of partnership and proclaimed opposition to the U.S. on a host of security issues.
(Reporting by Emily Chow in Singapore, additional reporting by Colleen Howe in Beijing; editing by Jason Neely and Sharon Singleton)