Russia Set to Expand Rouble for Gas Scheme to LNG

Russia’s natural gas giant Gazprom proposed expanding the government’s rouble for gas scheme for pipeline gas to LNG. The proposal comes after Putin signed a decree to take full control of the Sakhalin-2 LNG plant last week.

Putin’s decree will pave the way for creating a new firm that will take over all rights and obligations of Sakhalin Energy Investment Co.

While Russian state is the majority owner in the project, Shell and Japanese trading companies Mitsui and Mitsubishi also hold just under 50% stake.

Russia supplies around 8% of world’s LNG with 40 billion cubic meters (bcm) per year. The supply mainly comes from the Sakhalin-2 and Yamal LNG, Russia’s largest LNG plant.

Putin’s rouble for gas scheme became law in March, where Russia would require “unfriendly countries” to pay for pipeline gas in roubles.

Several European customers of Gazprom, including Bulgaria, Poland and Finland, were cut off after refusing to comply with Putin’s new rules.

While Europe is the biggest customer of Russia’s pipeline gas, most of the country’s LNG exports are shipped to Asia. In Europe, Spain is one  of the buyers of Russian LNG.

Russia last year earned $7.3 billion from LNG exports, according to the state tax service, comparing to $55.5 billion received from piped gas exports.

Before its invasion of Ukraine, Russia had planned to increase LNG production to as much as 140 million tonnes by 2035. It would account for a quarter of current global LNG exports.

It has since suggested this target may have to be delayed.

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Do you need to access special insights on this matter?

Start your 7-day free trial  and become a member today

Subscribe to Top Insights Today

Subscribe to Executive Newsletter Top Insights Today

The Executive Newsletter -Top Insights Today- puts global business events in perspective through special insights

Join the ranks of global executives and subscribe to Top Insights Today

Top Insights Today covers insights on energy, clean-tech, oil&gas, mining, rare earths, defense, aviation, infrastructure, manufacturing, electrical vehicles, big-tech, finance and politics of business

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Russian Energy Supplies to Asia to be Affected by Sanctions

After Putin said Russia recognizes two breakaway regions in Eastern Ukraine as independent, and sanctions from the West are on the horizon, Brent crude futures have risen to a seven year high. For big Asian economies that import oil, gas and coal heavily from Russia, new trade sanctions may have serious implications.

ASEAN Looks to Boost Renewable Energy Capabilities

Both governments and companies from Southeast Asia and Australia are looking to develop renewable energy sources and a green power grid in the region. 

Germany Set to Tighten Rules for Companies with Deep China Ties

German foreign ministry drafted a document that proposes to tighten rules for companies that are deeply connected to China, making them disclose more information and possibly conduct stress tests for geopolitical risks. The proposed measures are the latest in a series of efforts by the German government to reduce dependency on Beijing. The foreign ministry has singled out chemicals and automotive industries, saying: “The aim is to change the incentive structure for German companies with market economy instruments so that reducing export dependency is more attractive,”

Stay informed

error: This content is protected !!