HomeMediaLatest NewsAn attack from overseas: will the US be able to oust Russia from the European LNG market?

An attack from overseas: will the US be able to oust Russia from the European LNG market?

22 November 2023

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to the Novye Izvestia newspaper on the meaning of the US sanctions for the Russian LNG production development.

After the US sanctions, although postponed until the end of 2024, the biggest question remains whether Total will withdraw from the share capital. The participation of the French is not only an investment with which the concern entered a few years ago. These are also sales markets. The fact is that both Total and Mitsui planned to receive their share in the enterprise by products. Now there is a threat of secondary sanctions for them, Alexey Belogoryev says:

— From a formal point of view, each company has only 10% (in the project), and this does not pose a threat of secondary US sanctions, but according to the shareholder agreement ... the shareholders of Arctic LNG 2 have a proportional share in the LNG that will be produced. Accordingly, they will act as exporters of this LNG. And here lies the most uncertainty, participation in the capital does not carry the threat of secondary sanctions, and the direct distribution of produced gas to Arctic LNG 2 may entail sanctions if the United States is ready for this. This is also a big question, since we are talking about the closest allies in Europe and Japan.

Novatek will be forced to switch to the Russian fleet and to those tankers that, although they fly a false flag, have Russian beneficiaries through a chain of companies, the expert believes:

— This is quite a big problem, because our LNG projects initially focused on outsourcing the use of foreign fleet both from the point of view of ownership and from the point of view of management. Sovcomflot is our company, which has limited LNG transportation capabilities. The Zvezda plant, the only one that can build LNG tankers, will not cope with such a volume of orders. It is not designed for this. In addition, the plant itself is experiencing problems. And in the shipyards of South Korea, everything is more complicated. The shipyards of South Korea formally refuse to cooperate with Russia, although they seem to continue to build those tankers that were ordered from them.

— The problem of providing the fleet is now a key problem. The problem will especially worsen if an embargo is imposed on Russian LNG in Europe. And this is quite possible after 2026. At least, this option is being discussed. This will lengthen the transportation. It's one thing to supply to Europe, quite another to South Asia, especially to the East," Belogoryev points out.


You will receive notifications about the release of new materials on the site. We do not share email addresses with third parties and do not spam.
Thank you!
Your application is accepted.