Lobbying Efforts by Novatek to Restore U.S. Relations

By Anna Hirtenstein and Marwa Rashad
LONDON – Russia's largest liquefied natural gas producer, Novatek, is collaborating with lobbyists to mend relations with the U.S. after sanctions were imposed on its massive Arctic LNG 2 project. Sources indicate that Russian-U.S. relations plummeted after Russia's invasion of Ukraine in 2022, leading to extensive sanctions from President Joe Biden's administration against various entities supporting the war effort, including Novatek's Arctic LNG 2.

The apprehension surrounding the return of President-elect Donald Trump on January 20, however, brings a glimmer of hope for some in Russia, despite skepticism among others about real changes. Trump had claimed he could end the ongoing war within 24 hours of taking office. Novatek is eager to restore ties with Western nations, anticipating an end to the Ukraine conflict, as indicated by sources who suggest that senior executive Denis Solovyov recently traveled to Washington to engage with a U.S. lobbying entity.

Plans are underway for Novatek and the lobbyists to engage with U.S. government organizations in the upcoming weeks. While Solovyov refrained from commenting, Novatek and the U.S. State Department did not provide any immediate statements regarding this.

The company aims to secure the removal of its key Arctic LNG 2 project from the sanctions list. These sanctions have forced Arctic LNG 2 to declare force majeure on supplies and halt its production. According to sources, Novatek intends to leverage its tax status to appeal to Western interests, arguing that it does not financially support the war. In contrast, other Russian gas firms, such as Gazprom, are significant contributors to Russia’s federal budget and thereby the war effort.

Novatek's other asset, Yamal LNG, currently benefits from significant tax exemptions, such as no export duties on LNG and gas condensate and a zero mineral extraction tax for fuel production. It has a 12-year tax exemption from becoming profitable, meaning it will not need to contribute taxes to the Kremlin until 2030.

(This story has been clarified to indicate 'working with lobbyists' instead of 'hires lobbyists' in the headline.)