HomeMediaLatest NewsIs Russian LNG an inappropriate ambition for Vietnam or a strict necessity?

Is Russian LNG an inappropriate ambition for Vietnam or a strict necessity?

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented to the Neft and Capital Internet portal on Russia's plans for cooperation with Vietnam in the field of LNG.

As Alexey Gromov noted, the prospects of the Vietnamese market for Russia should be considered taking into account the constant deterioration in the European market. Today, the main Russian projects, primarily Yamal LNG, are focused on the EU countries. However, in the 14th package of sanctions against Russia in Europe, a ban on the LNG transshipment in the Old World’s ports has already been adopted, i. e. we will not be able to re-export LNG from these sea harbors.

"It is obvious that the next step, when additional LNG export capacities are added to the world market from 2025 due to the appearance of new terminals in a number of countries, the EU will generally impose an embargo on Russian liquefied natural gas. In this situation, Moscow today needs to think about where to direct the existing capacities, which are now going in the western direction," the expert said.

He stressed that besides Europe, Asia will have the main growth in LNG demand, and this should be used. Another thing is that logistics will become more difficult for Russia. It is one thing to supply liquefied natural gas at attractive prices for the seller to the EU countries via a short logistics arm, and quite another — through the Suez Canal to Asia. The profitability of such supplies will be much lower.

"But if we are talking about the future, then there is a good potential. From 2026, according to representatives of the Northern Sea Route, year-round navigation will begin along this route. If there is the necessary number of icebreaking vessels, then trade with Asia from Russia will become more intensive. In this light, LNG supplies to Vietnam, again taking into account potential problems in the European market, seem more than relevant," Alexey Gromov believes.

 

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department
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