Russia delays LNG output target of 100MT per year

MOSCOW: Russia has pushed back by “several years” a plan to reach an annual liquefied natural gas output target of 100 million tons, Deputy Prime Minister Alexander Novak told state TV on Thursday, citing the effect of Western sanctions on its energy industry.

Russia’s long-term plans to gain a fifth of the global LNG market by 2030-2035, from 8% currently, have been challenged by sanctions imposed over the conflict in Ukraine, including against the new Arctic LNG 2 plant.

A recently updated government strategy, which outlines Russia’s long-term plans in energy sector, sees the country producing 90-105 million tons of LNG by 2030 and 110-130 million tons by 2036.

“Our goal was to reach 100 million tons. It is clear that, due to sanctions-related restrictions, this will now be pushed back by several years,” Novak told Rossiya-24 TV station, without elaborating.

Novak also said that Russia’s oil and gas condensate production this year is seen broadly unchanged from 2024, at around 516 million tons, or some 10.32 million barrels per day.

That’s an improvement on a previous outlook for 1 percent decline, given by President Vladimir Putin in October.

Russia’s LNG production rose by 5.4 percent in 2024 to 34.7 million tons, below the expected 35.2 million tons.

The European Union plans to ban Russian LNG imports from January 1, 2027, while there is also fierce competition form the United States, which is expanding sales in Europe, and from Qatar, which already dominating sales to Asia.

Postponements in the implementation of the Arctic LNG 2 project, which started production in December 2023 but was only able to deliver a first cargo to end-buyers in China this August, underscore Russia’s struggle to significantly raise LNG output.

Murmansk LNG, which is slated to become Russia’s largest LNG plant, with eventual output of 20.4 million tons per year, also faces delays.