US sanctions are hindering Russia's ambitious liquefied natural gas (LNG) export expansion plans, notably by delaying shipments from the Arctic LNG 2 project, Bloomberg reported on Tuesday. Despite commencing production in December, the project has yet to export any gas due to these restrictions, forcing a significant reduction in output by February. Novatek PJSC, the primary shareholder, wanted to commence deliveries by the end of March but has faced setbacks. Negotiations to sell the initial shipment to Chinese buyers are underway, but uncertainty looms over potential US retaliation. These challenges underscore the difficulty Russia faces in tripling LNG exports by 2030, especially after US sanctions effectively ousted other investors from the project. Despite efforts to secure buyers in China and India, concerns persist regarding the risk of sanctions. The Northern Sea Route is seen as the fastest to China, especially during summer when navigation is feasible, but challenges remain regarding vessel accessibility and ice conditions. The Arctic LNG 2 project, with a planned annual production capacity of nearly 20 million tons, has yet to reach its full potential amid ongoing sanctions and logistical hurdles.
