Russian LNG sales will be stymied by a lack of tankers

Significance Russia’s gas export strategy is predicated on the rapid growth of liquefied natural gas (LNG) exports. Following the collapse of pipeline gas sales to Europe, Russia’s plans to export more via pipelines are all based on increasing supplies to China. Russian gas exporters realise that they need to ramp up sales of LNG to other markets if they are to avoid becoming too dependent on Beijing. Impacts Pipeline gas exports will only rise significantly if China signs the deal to build Power of Siberia 2. The impact on the federal budget of not meeting LNG ambitions is likely to be modest due to LNG projects enjoying generous tax breaks. Russia’s dependence on China as the most important source of demand for gas will grow even stronger.