Ten years of sanctions: how Russia implements its ambitions in terms of the West blockade

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented on the future of the Russian LNG industry to RIA "Prime".

According to Alexey Gromov, restrictions on Russian LNG in 2014 had almost no effect on the companies ambitions.

"We can say that the sanctions instruments that were used until recently, did not slow down the development of the LNG industry in Russia in any way," the agency's interlocutor explained.

The Russian LNG industry has been under a real "sanctions downpour" since November last year. The start was given by targeted US sanctions against the Arctic LNG 2 project, the baton was taken by the 14th package of the EU sanctions.

Blocking sanctions have limited the possibility of transporting Russian LNG from Arctic projects, the expert says. At the moment, in his opinion, the fleet of ice-class gas carriers is the main vulnerability of the industry. And this problem cannot be solved very quickly.

According to Gromov, if Russia were in normal market conditions, Russian LNG produced in the Arctic would be more profitable than LNG from global competitors.

"First of all, to liquefy natural gas, it is necessary to provide low temperatures, and these are high energy costs. All other things being equal, we can compete on price with Qatari LNG. And American LNG is 20-40% more expensive than Russian LNG," the expert notes.

He is confident that even subsequent sanctions "will not put an end to the Russian LNG industry." However, new projects will be implemented with delays. The main task for the development of the LNG industry in Russia, according to the expert, is full technological independence. Finally, Russia needs to prepare sales markets in advance, Gromov believes.