# Novatek Russia's largest natural gas producer outside state hands, founded in 1994 and built on the gas condensate fields of the Yamal Peninsula. **Leonid Mikhelson** is its chief executive and co-owner; [[Gennady Timchenko]], the commodities billionaire and longtime [[Vladimir Putin]] associate sanctioned by the United States in March 2014, holds a stake through his Volga Group. The company is nominally private, which is the point. Where [[Gazprom]] and [[Rosneft]] are state corporations, Novatek is the vehicle through which Russia built an Arctic liquefied natural gas industry using Western capital, Western technology and Western shipping — and it is the asset Moscow has spent three years trying to get back out from under sanctions. Its two flagship projects are **Yamal LNG**, which reached production in 2017, and its successor **Arctic LNG 2**, which did not. ## What is actually sanctioned This distinction matters and is routinely collapsed in press accounts. | Entity | List | Authority | |---|---|---| | OAO Novatek (the parent) | **Non-SDN** — sectoral | Executive Order 13662, **Directive 2** | | Arctic LNG 2 (the project) | **SDN** — full blocking | Designated November 2, 2023 | Novatek itself has never carried a full blocking designation. Its OFAC record sits on the **non-SDN consolidated list** under program `UKRAINE-EO13662`, subject to Directive 2 — a sectoral restriction on new financing, not a prohibition on dealing with the company. What the United States blocked outright, a few weeks before it was due to start shipping, was **Arctic LNG 2**: the project entity, its vessels and its service providers. The practical effect was that the plant was finished and could not sell. Buyers walked, shipping dried up, and the partially built liquefaction trains and modules became stranded Russian industrial equipment with nowhere to go. That stranded hardware is the thread that runs into Alaska. > [!warning] "Sanctioned company" is imprecise here > Describing Novatek flatly as a U.S.-sanctioned company — as much reporting does — overstates the parent's status and understates the project's. The parent is under sectoral restrictions; the Arctic LNG 2 project is fully blocked. The practical consequence of using Novatek money or Novatek equipment in the United States still runs through [[Office of Foreign Assets Control]] authorization either way. ## The Graham Act and the waiver The [[Lindsey O. Graham Sanctioning Russia and Iran Act of 2026]], signed September 18, 2026, reached Novatek directly. The bill's own summary names **Yamal LNG and Arctic LNG 1, 2 and 3** among "Russia's largest state energy projects" slated for mandatory designation — the entire Novatek Arctic portfolio, built and unbuilt. Those provisions were to attach on October 18, 2026. On **October 16** — two days before — [[Donald Trump]] signed an executive order waiving nearly all of them, with no expiration. The full sequence is in the [[Russia Sanctions Relief Ledger]]. ## The Alaska project On **October 23, 2026**, the *New York Times* reported that Novatek was the hidden source of financing behind **[[Polar LNG]]**, the developer of a $25 billion gas liquefaction and export project on Alaska's North Slope. The *Financial Times* reported the same the following day, working from correspondence involving a senior Novatek representative, **Denis Soloviev**, that discussed arranging and accelerating transfers to the American side. What the reporting establishes: - Novatek **confirmed to the *Times*** that it intended to acquire a **minority stake** in the project, and acknowledged an agreement permitting the use of its technology in Alaska. - Novatek signed a **memorandum of understanding** with the project in **April 2026**. - Novatek executives discussed routing up to **$15 million** in financing through **Tech Wave**, a firm based in the United Arab Emirates. - The terminal was to be built using **partially completed liquefaction equipment originally manufactured for Arctic LNG 2** — the blocked project — which would require U.S. authorization to import and use. - Novatek denied that any of this was tied to sanctions relief for Arctic LNG 2. Reporting by both outlets describes sources saying the trade was exactly that. - According to the *Times*, cooperation involving Novatek was discussed in **September 2026** between Putin and Trump's envoys [[Steve Witkoff]] and [[Jared Kushner]]. **Joel Riddle**, the project's chief executive, resigned in **September 2026** after concluding that the money was Russian rather than Emirati and that Novatek was directing company strategy. Most of the senior management team followed him out. ## Why it matters Novatek is the clearest case in the file of sanctions functioning as a **negotiating asset rather than a cost**. The company's Arctic hardware is worth little while Arctic LNG 2 stays blocked and a great deal the moment it isn't — so the discount and the upside have the same source, exactly the structure the Kremlin proposed for [[Lukoil]]'s overseas assets a month earlier. What the Alaska reporting adds is a direction of travel. The Lukoil proposal asked Americans to buy Russian assets cheaply. The Polar LNG arrangement would put sanctioned Russian equipment and Russian money inside a project on U.S. soil, financed through a third country, at a moment when the statute that would have blocked it had just been switched off. ## See Also - [[Polar LNG]] — the Alaska project - [[Lukoil]] — the parallel asset proposal from the same negotiating channel - [[Gazprom]] · [[Rosneft]] — the state producers Novatek is measured against - [[Gennady Timchenko]] — shareholder; sanctioned 2014 - [[Russia Sanctions Relief Ledger]] — the dated record of easings and pressure - [[Lindsey O. Graham Sanctioning Russia and Iran Act of 2026]] — the law that named its projects - [[How Russian Oil Pays for the War]] — what the sanctions act on - [[Arctic Geopolitics]] — the resource competition the Arctic LNG build-out belongs to - [[Secondary Sanctions]] · [[Russian Oligarchy]]