Novatek Discussed Up to $15 Million in Financing for Polar’s Alaska Gas Project
Key Facts
Joel Riddle, the former chief executive of Polar LNG, left the company in September, along with at least two senior executives, Alaska News reported. The departures came amid a dispute over the source of financing for the Polar Train LNG project and the role of Russia’s Novatek. Riddle said he later learned that part of the financing he believed came from Abu Dhabi-based Tech Wave originated with Novatek. Alaska News cited messages reviewed by The New York Times as saying Novatek officials discussed providing up to $15 million to support Polar through Tech Wave, including an expected initial payment of $5 million. This is Riddle’s account of the financing and strategic influence, not an announced official finding of misconduct.
The company offered a different account of Riddle’s departure, saying he was fired for cause and describing him as a disgruntled former employee, according to a correction reported by Alaska News. Polar said it is investigating allegations concerning him and that the investigation could lead to litigation. The company, meanwhile, appointed Tim Tuckington interim chief executive of Polar Train LNG. Polar said Tuckington worked for more than 17 years at Goldman Sachs and served as chief executive of Goldman Sachs Russia until August 2022. No federal agency has publicly announced an enforcement action or ruling concerning the financing allegations.
Polar said Tech Wave provided financing for the project and began preliminary engineering work with U.S. contractors. The company also submitted an application to the Office of Foreign Assets Control for a license to buy an unfinished gravity-based structure from Novatek. Novatek said it was moving to become a minority shareholder in Polar and that the project requires U.S. and Russian approvals. The Russian company denied that access to its technology was conditional on the lifting of U.S. sanctions on the Arctic LNG 2 project. Polar says its development activities comply with U.S. law, while no federal agency has publicly announced action concerning the allegations.
U.S. restrictions on Novatek date to the Treasury Department’s announcement on July 16, 2014, and included financing new debt maturing after more than 90 days or dealing in it. Those restrictions were not a blanket ban on all transactions with the company: Treasury said it had not frozen Novatek’s assets or prohibited dealings with it beyond the specified debt restrictions. On November 2, 2023, the State Department announced sanctions on Arctic LNG 2, which it described as a key entity involved in developing, operating and owning the Russian project. That action is separate from the sectoral restrictions on financing Novatek. The license application to buy equipment from the Russian company makes the approval process a practical part of the Polar project’s development.
Polar estimates the first phase will cost between $8 billion and $9 billion and is targeting more than half of its financing to come from U.S. capital, according to the company’s announcement when it launched the project, as reported by Alaska News. The $25 billion figure in the first draft does not apply to Polar; the information available here does not substantiate that figure for the project. Polar is also separate from Alaska LNG, led by Glenfarne in partnership with the state’s Alaska Gasline Development Corporation. Glenfarne owns 75% of the Alaska LNG project company, compared with 25% for the state corporation. The Polar project proposes building a liquefaction facility near the coast in northern Alaska.
Polar says it is targeting the start of gas deliveries from northern Alaska by the end of 2030, but the schedule is contingent on completing permits, financing, engineering and other development requirements. The company is also exploring opportunities to supply gas to south-central Alaska. It said the ice-capable offshore structure could open opportunities for the U.S. shipbuilding industry. Alaska Department of Natural Resources records show the separate Alaska LNG project remains in project status, and conditional right-of-way agreements must be converted before construction can begin on state land. For Polar, the delivery target remains tied to completing the development and approval processes the company has announced.