The fight for natural gas between the US and Russia grows

For the first time, the United States has begun to directly attack Russia’s ability to export liquefied natural gas (LNG). This measure by Washington may cause disruptions in global energy markets.

Although European countries imposed significant economic sanctions on Russia last year following the Russia-Ukraine war, Moscow continued to import LNG. Until recently, the United States had refrained from increasing pressure on its European allies struggling with energy issues.

However, in early November, the US State Department announced that it would impose sanctions on a new Russian project known as Arctic LNG 2. According to officials, lawyers and analysts, these sanctions will prevent countries in Europe and Asia from purchasing gas from this project. , which will begin production next year.

HOW WILL THE MARKET BE AFFECTED?

Francis Bond, a sanctions expert at law firm Macfarlanes, said the United States was trying to “poison the entire project” by attacking the project’s operator.

The project was expected to start shipping LNG to the international market in the first quarter of 2024. Market analysts predicted that congestion in Europe would be relieved thanks to this project.

Columbia University energy expert Anne-Sophie Corbeau said that if Arctic LNG 2 does not begin exporting as planned in 2024, “markets will remain tight for longer.” Furthermore, the announced sanctions will also affect Russia’s long-term goal of increasing LNG supplies and rival leaders in the market such as the United States and Qatar.

THERE WERE ALSO CHINESE, FRENCH AND JAPANESE PARTNERS

Arctic LNG 2 is managed by private Russian company Novatek, which owns a 60 percent stake. Other shareholders are the French TotalEnergies, two Chinese state-owned companies and two Japanese companies.

On the other hand, the United States has not yet directly targeted Russia’s other large LNG projects, Yamal LNG and Sakhalin 2, which ship fuel to Europe and Asia.