Russia delays LNG output target on sanctions

Plans for 20% of global LNG market by 2030-2035 challenged; output projected at 90-105 million tonnes by 2030

MOSCOW:

Russia has pushed back by "several years" a plan to reach an annual liquefied natural gas output target of 100 million tonnes, Deputy Prime Minister Alexander Novak told state TV on Thursday, citing the effect of Western sanctions on its energy industry.

Russia's long-term plans to gain a fifth of the global LNG market by 2030-2035, from 8% currently, have been challenged by sanctions imposed over the conflict in Ukraine, including against the new Arctic LNG 2 plant.

A recently updated government strategy, which outlines Russia's long-term plans in energy sector, sees the country producing 90-105 million tonnes of LNG by 2030 and 110-130 million tonnes by 2036.

"Our goal was to reach 100 million tonnes. It is clear that, due to sanctions-related restrictions, this will now be pushed back by several years," Novak told Rossiya-24 TV station, without elaborating.

Novak also said that Russia's oil and gas condensate production this year is seen broadly unchanged from 2024, at around 516 million tonnes, or some 10.32 million barrels per day.

That's an improvement on a previous outlook for 1% decline, given by President Vladimir Putin in October.

Russia's LNG production rose by 5.4% in 2024 to 34.7 million tonnes, below the expected 35.2 million tonnes.

The European Union plans to ban Russian LNG imports from January 1, 2027, while there is also fierce competition form the United States, which is expanding sales in Europe, and from Qatar, which already dominating sales to Asia.

Postponements in the implementation of the Arctic LNG 2 project, which started production in December 2023 but was only able to deliver a first cargo to end-buyers in China this August, underscore Russia's struggle to significantly raise LNG output.

Murmansk LNG, which is slated to become Russia's largest LNG plant, with eventual output of 20.4 million tonnes per year, also faces delays.