US tries to prevent Russia from controlling global LNG market

The US government is planning to prevent Russia from becoming one of the main exporters of liquefied natural gas (LNG), which could cause disruptions in the world energy markets, a development Washington has so far tried to avoid.

Source: Financial Times 

Details: It is noted that EU countries continue to import Russian LNG, as Moscow has reduced the supply of pipeline gas to the continent. Until recently, the US has tried to avoid supply disruptions so as not to increase pressure on allies struggling with shortages.

However, in early November, the US State Department announced sanctions on Russia's new Arctic LNG 2 project, effectively blocking countries in Europe and Asia from buying gas from that supplier when it starts production next year.

"While the US and its allies have imposed sanctions on Russian energy projects in the past in response to the war in Ukraine, seeking to starve them of financing and equipment, this is the first time LNG supplies are directly affected," the article reads.

Arctic LNG 2 is located on the Gyda Peninsula, which allows gas to be exported to both European and Asian markets. Arctic LNG 2 is set to become Russia's third liquefied natural gas project, bolstering the Kremlin's ambitions to be a leading exporter in the field.

With full production, it will account for 20% of Russia's planned production of 100 million tonnes of LNG per year by 2030, which is more than three times the volume that the country exports now.

Arctic LNG 2 is headed by the Russian private company Novatek, which owns 60% of its shares. Other shareholders are France's TotalEnergies, two Chinese state-owned companies and a Japanese joint venture between trading house Mitsui & Co and government-backed Jogmec, each holding a 10% stake.

Background:

On 2 November, the US Department of State imposed economic sanctions against dozens of Russian individuals and legal entities. Among others, the sanctions concern energy projects and Russia’s military-industrial complex.

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