• 2 minutes California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 6 minutes China and India are both needing more coal and prices are now extremely high. They need maximum fossil fuel.
  • 11 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 3 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 12 hours Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 1 hour "A Very Predictable Global Energy Crisis" by Irina Slav --- MUST READ
  • 6 hours Two Good and Plausible Ideas about Saving Water and Redirecting it to Where it is Needed.
  • 2 days Did China cherry-pick the factors that affected the economic slow-down?
  • 5 hours "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 8 hours Are you aware of Oil Price short videos on our energy topics?
  • 13 hours Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 16 hours NordStream2
  • 4 days U.S. : Employers Can Buy Retirement Security for $2.64 an Hour
  • 410 days Class Act: Bet You've Never Seen A President Do This.
  • 4 days Forecasts for Natural Gas
  • 4 days Australia sues Neoen for lack of power from its Tesla battery
  • 4 days Nord Stream - US/German consultations
Is America Doomed To Replicate Europe’s Energy Crisis?

Is America Doomed To Replicate Europe’s Energy Crisis?

Europe’s energy crisis is dominating…

Hungary And Ukraine Butt Heads Over A New Natural Gas Deal

Hungary And Ukraine Butt Heads Over A New Natural Gas Deal

Ukraine’s ambassador to Hungary has…

Russia's Energy Influence In Europe Is Growing

Russia's Energy Influence In Europe Is Growing

Russia’s energy influence in Europe…

Nick Cunningham

Nick Cunningham

Nick Cunningham is an independent journalist, covering oil and gas, energy and environmental policy, and international politics. He is based in Portland, Oregon. 

More Info

Premium Content

Russia Takes Steps to Increase LNG Exports

On November 22, the Russian Parliament voted to loosen the monopoly power that Gazprom has over exporting natural gas. Gazprom – one of the largest producers of natural gas in the world – has had exclusive control over exporting gas, which has largely focused on pipeline exports to Europe. With demand sagging in the west, Russia is shifting east, hoping to cash in on rising gas demand in Asia.  And instead of building pipelines, Russia is now seeking a big expansion of liquefied natural gas capacity.

Should Russia liberalize its gas export rules, which still needs approval from President Vladimir Putin, it is well positioned to serve East Asian customers, particularly Japan, China, and South Korea. Japan, already the world’s largest importer of LNG, desperately needs natural gas to generate power after it shut down all of its 54 nuclear reactors.

Russia already exports LNG from Sakhalin, an island to Russia’s east and Japan’s north. Gazprom wants to build more liquefaction capacity, with plans to invest $13.5 billion to build a terminal at Vladivostok to export LNG to Japan. That project calls for three LNG trains capable of producing 5 million tonnes of LNG per year each, with the first beginning operation in 2018.

The latest move by the parliament, however, will allow for other competitors to enter the LNG export market, ending Gazprom’s monopoly grip. In particular, Russia’s second largest gas company, Novatek, will be able to move forward with its Yamal LNG project. With plans to be completed by 2016, the $15-$20 billion project will start with a single LNG train of 5.5 million tonnes from the Yamal peninsula in the Russian arctic. Two more trains of similar capacity will each be added in 2017 and 2018, respectively.

Related article: Russia Opens LNG Floodgates

What does this mean for LNG globally? Russia hopes by allowing new entrants into the export market it can double its share of global LNG trade from 4.5% currently up to 10% by 2020, with an export capacity of 35 to 40 million tonnes annually.

However, Russia is in a race against several other projects that also hope to come online in the coming years. Australia, in particular, is poised to leap ahead of Qatar as the world’s largest exporter of LNG by 2017 due to the 62 million tonnes per year of LNG capacity currently under construction. And the U.S. hopes to break into the LNG trade by exporting its glut of shale gas. The U.S. is currently building 18 million tonnes per year. More modest capacity additions will come from Malaysia, Papua New Guinea, and Angola.

The flurry of LNG projects under construction is the result of high demand and inelastic supply, which has sent LNG prices in Asia higher in the short-term, while they remain lower elsewhere. Yet, many of these projects are expected to come online around the same time – between 2016-2018. Once they do, demand – along with the gap in prices – will likely ease.

U.S. companies have pushed the Obama administration to green light export facilities quickly so that they do not miss out as other countries move ahead. The Department of Energy has approved four facilities thus far, the latest of which is on the east coast.


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News