Despite the headwinds of anti-Russian sanctions, the export of liquefied natural gas (LNG) from Russia remains resilient. In December 2023, a record-breaking volume of LNG was shipped, and the story goes beyond the surging demand from South Asian countries. Europe continues to purchase Russian LNG, both through “gray import” channels and official transactions. Remarkably, even amidst frosty rhetoric, Japan also joins the ranks of Russian LNG buyers.
Breaking Records: The December Surge
Last month, Russia exported a staggering 3.2 million tonnes of LNG, marking an all-time high for the industry. This volume represents a 6.6 per cent increase compared to the previous year and a 5.6 per cent surge from the preceding month. Notably, over half of this LNG—1.9 million tonnes—originated from the “Yamal LNG” project. Furthermore, despite Western restrictions, the launch of the first train of Novatek’s “Arctic LNG-2” plant on the Yamal Peninsula proceeded without hindrance.
The Global LNG Landscape: A Tug of War
The global LNG market is currently in flux, with geopolitical dynamics at play. The quest for control over LNG resources serves as a powerful incentive, driving the United States to escalate tensions with Russia and, particularly, to drive wedges between Russia and Europe. However, Russia remains resolute. Vice Prime Minister Alexander Novak declared that by 2030, Russia aims to increase its share in global LNG production from 8 per cent to 20 per cent.
Diversification Strategies: Beyond Exports
Russian authorities are not solely reliant on LNG exports. They pursue a diversified approach, leveraging both international markets and the domestic arena. While the current focus lies predominantly on pipeline gas within Russia, strategic plans include the liquefaction of natural gas for domestic use. For instance, the gasification of the Kamchatka region will rely on LNG, providing a buffer against demand fluctuations and external market logistics. A well-executed diversification of supply routes between the West and the East will enhance market resilience.
As the energy landscape evolves, Russia’s LNG prowess continues to defy sanctions and geopolitical headwinds, making it a force to be reckoned with in the global energy arena.
Source: SMP
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