Russia struggles to reach LNG targets as sanctions bite hard

Exports of Russia's LNG will likely not exceed 67 million tonnes by 2030, falling far short of its 100 million target due to international sanctions, experts said at an industry conference on Friday.

Russia has focused on development of LNG, which could be delivered by tankers, as its pipeline gas exports to Europe have plummeted over the conflict with Ukraine, while it struggled to significantly boost it to China.

It has planned to raise its share in the global LNG market to fifth by 2030-2035.

However, due to Western sanctions and a possible LNG imports embargo from Europe, Russia's LNG exports will likely increase only to 59-60 million tonnes by that time, said Alexei Gromov from the Moscow-based Institute for Energy and Finance Foundation.

Andrei Klepach, chief economist at state lender VEB, said Russia's LNG exports are seen reaching no more than 67 million tonnes by 2030.

Russia's new Arctic LNG 2 tentatively began production of LNG on the Gydan peninsula, which juts into the Kara Sea, in December 2023, but has struggled to sell the product.

Western sanctions prompted foreign shareholders to freeze participation and Novatek to issue a force majeure to warn it would not be able to honour contractual obligations in relation to Arctic LNG 2.

Gromov believes that Arctic LNG 2 will not reach its full capacity of just under 20 million tonnes per year by 2029. He said Gazprom's large LNG project on the shores of the Baltic Sea will start loadings not earlier than 2029, while other large scale projects will be postponed.

(Reporting by Oksana Kobzeva; writing by Vladimir Soldatkin, Editing by Franklin Paul)