On December 8, a first LNG cargo left Russia’s Yamal Peninsula. The event has been considered a great win not only by Yamal LNG shareholders but also by the Russian government, which sees the project as a first step to Russia’s becoming the world’s top LNG player. Yamal LNG was completed on time despite difficult Arctic conditions and technological and financial difficulties compounded by U.S. sanctions. But, as it often happens, the reality and the effects of Russia’s new endeavor are more nuanced.
To begin, Yamal LNG has not been the first Russian LNG facility. The first one—Sakhalin 2—has been operating since 2009, delivering LNG mainly to the Asia-Pacific region. The project has been managed by state-owned Gazprom, until recently, the only Russian company allowed to export natural gas.
In 2013, the Russian government allowed Russian companies other than Gazprom to export natural gas but only in the form of LNG while keeping Gazprom export monopoly in piped gas. The decision allowed Novatek, a private Russian company, to pursue the Yamal project.
By Anna Mikulska
See full article (Kleinman Center for energy Policy website)