Novatek Sues Hanwha for $1 Billion Over Arctic LNG Sanctions Row

Novatek's Arctic LNG 2 project has filed a claim of around $1.02 billion against South Korean shipbuilder Hanwha Ocean, citing the termination of a shipbuilding contract due to US sanctions imposed on Russia over its actions in Ukraine.

Arctic LNG 2 is a liquefied natural gas project led by Novatek, with 60% ownership, and was expected to become one of Russia's largest LNG plants, producing 19.8 million tonnes per year.

The project began production in December 2023, but cargo deliveries to end-users in China only started in August 2024, after the sanctions were imposed.

Hanwha Ocean had agreed to build six Arc7 tankers for the project, including three for Russia's Sovcomflot and three for Japan's Mitsui OSK Lines. However, due to the sanctions, Hanwha cancelled the contract with Sovcomflot.