Liquefied natural gas (LNG) exports from Russia have experienced continuous growth throughout this year, driven by increasing demand in both Europe and Asia, according to Energy Minister Nikolay Shulginov. Speaking at the Eastern Economic Forum (EEF) in Vladivostok, Shulginov highlighted the rising popularity of LNG exports due to their efficiency and flexibility compared to pipeline supplies.
Shulginov emphasized that although the demand for Russian pipeline natural gas has historically been greater than that for LNG, the latter is catching up rapidly. He noted that the positive dynamics of LNG exports are already visible, with buyers of Russian LNG worldwide, including the new partners in Southeast Asia and consumers in Europe.
In 2022, Russia’s LNG production saw an increase of 8.1%, reaching 32.5 million tons, as reported by Russia’s statistical agency Rosstat. However, Shulginov acknowledged that the current LNG output is insufficient to meet the growing demand. He stressed the need for additional gas liquefaction lines as the existing capacities are already fully loaded.
To address this issue, Russia has developed a program to increase LNG production to 100 million tons per year by 2030. Shulginov expressed optimism about the Arctic LNG 2 project, which is set to have its first production line operational in the near future, reaching a full capacity of about 6.8 million tons annually. Additionally, discussions are underway for the construction of a new LNG plant in Murmansk with three liquefaction lines, each with a capacity of 6.8 million tons.
According to a report by think-tank Global Witness based on Kpler data, China emerged as the largest buyer of Russian LNG in the period between January and July this year, followed by Spain and Belgium. The report also highlighted a significant increase in the European Union’s (EU) purchases of Russian LNG, with a surge of 40% compared to the same period in 2021 and a 1.7% increase compared to last year.
The EU has not yet imposed sanctions on Russian gas imports but has implemented measures to restrict the inflow of Russian gas supplies and announced plans to reduce imports of Russian energy by 2027. However, based on current trade flows, Global Witness analysts predict that EU countries will witness record volumes of LNG imports from Russia in 2023.
Overall, the demand for Russian LNG continues to grow steadily, with both Europe and Asia displaying a strong appetite for this energy source. Russia’s plans to increase LNG production to meet this demand signify the country’s commitment to remaining a key player in the global LNG market.