Despite a constant threat of US sanctions, Italian company Nuovo Pignone, owned by American multinational conglomerate General Electric, sealed a $500-million deal for the supply of gas turbines for a new Russian Novatek facility in the Arctic region.
Another lucrative contract worth $2.2 billion for platform construction was signed with Italian energy contractor Saipem and Turkey’s Renaissance services company.
Under the terms of the first deal, the GE subsidiary will deliver 20 LM9000 gas turbines with a capacity of up to 75 megawatts, built on the basis of Boeing 777 engines.
General Electric won the contract by out pacing bidders such as Siemens and Mitsubishi.
If Washington hits Russia’s energy sector with a new wave of sanctions, under export control rules, Nuovo Pignone will still deal with the Italian government. Rome approved the contract signed between the Italian and Russian companies.
Novatek is planning to launch operations at Arctic LNG 2 at the end of 2022, which will produce 19.8 million tons of LNG per year when at full capacity. The project is estimated to cost around $22 billion.
Though Novatek, Russia’s largest privately owned natural gas producer, has been subject to US financial sanctions since 2014, equipment supplies for LNG projects are not currently being targeted by the penalties.
The company managed to bypass the measures by switching its financing to euros from dollars four years ago. Novatek also won $12 billion worth of Chinese funding to replace Western financing.
RT. com / ABC Flash Point Oil & Gas News 2018.