Russia’s Novatek is hiring lobbyists to thaw US relations, sources told Reuters

Authors: Anna Hirtenstein and Marva Rashad

LONDON – Russia’s biggest liquefied natural gas producer Novatek is working with lobbyists to try to restore relations with the United States after Washington imposed sanctions on its massive Arctic LNG 2 project, two sources familiar with the matter said.

Relations between Russia and the United States fell to a post-Cold War low following Moscow’s 2022 invasion of Ukraine, when President Joe Biden’s administration imposed sanctions on hundreds of entities and individuals for supporting the war effort.

These include Novatek’s Arctic LNG 2, which was to become Russia’s largest LNG plant.

Some in Russia view US President-elect Donald Trump’s return to the White House on January 20 with cautious optimism, although others think that will change little.

During his campaign, Trump promised to end the nearly three-year war within 24 hours of his inauguration, if not sooner. Novatek is seeking to restore relations with the West, pending the end of the war in Ukraine, one source said.

Its senior executive and board member, Denis Solovyov, traveled from Moscow to Washington in recent days to begin working with the US lobbying firm, the sources said.

Novatek and lobbyists plan to approach U.S. government entities in the coming weeks, the sources said.

Solovyov declined to comment when reached by phone. Novatek did not respond to a request for comment. The US State Department did not immediately respond to a request for comment.

Novatek hopes to get its flagship Arctic LNG 2 off the current sanctions list, another source said. The sanctions caused Arctic LNG 2 to declare a supply force majeure and halt its production.

Both sources, who spoke on condition of anonymity because of the sensitivity of the matter, said Novatek would use its tax status to appeal to the West and say it is not a financial contributor to Russia’s war effort.

Other Russian gas companies such as Gazprom ( MCKS: ) pay corporate tax, which is considered one of the largest contributors to the Russian budget and therefore indirectly finances the war.

Jamal LNG, owned by Novatek, which is not sanctioned, enjoys significant tax benefits such as zero export duty on LNG and gas condensate, as well as a zero tax rate on the extraction of minerals to produce these fuels, a presentation to investors shows.

The project has a 12-year tax exemption from the moment it becomes profitable, meaning it does not have to pay the Kremlin until 2030.