LNG for no one: how Russia plans to increase gas production in the face of sanctions

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to Forbes on the problems and prospects of Russian LNG exports.

"As we have seen, over the past two years, the United States has been imposing sanctions against the Russian oil sector reluctantly and with great caution, since the global balance does not converge without Russia," Belogoryev recalls. — But big changes are coming to the LNG market by the end of 2025: the market will swing from a weak deficit to a surplus, and at least in 2026-2028 the market will live in conditions of a tangible oversupply. Moreover, according to the estimates of the Institute for Energy and Finance, this surplus is inevitable, even if new production facilities are not introduced in Russia at all. The United States is also well aware of this, and the Joe Biden administration is clearly determined to strangle, as far as it can, not only Arctic LNG-2, but all large-capacity Russian plants under construction and planned.

For the United States, there is a direct economic interest in this: firstly, they are making way for their own factories, many of which have not yet made investment decisions. And for such solutions, guarantees of demand are needed, hence the frontal attack against long—term Arctic LNG-2 contracts. Secondly, less supply means higher prices: in the United States, as well as around the world, producers are wary of the prospects for lower gas prices in the second half of the 2020s."

The construction of the second stage of the Arctic LNG-2 plant, as well as in the future of the third, cannot be stopped by the US sanctions, it is rather slowed down by the withdrawal of Western technology companies from the project, Belogoryev believes.