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Russia Aims to Topple Qatar From LNG Top Spot

Russia Aims to Topple Qatar From LNG Top SpotRussia Aims to Topple Qatar From LNG Top Spot

Russian gas producer Novatek aims to topple Qatar as the world’s biggest exporter of liquefied natural gas as it gets closer to completing its first LNG project, a top executive said, batting away concerns about US sanctions on the sector.

The country’s largest non-state gas producer is expected to start exporting LNG from the first phase of the Yamal project, situated far above the Arctic circle, towards the end of this year and may bring forward its final stage by six months, CFO Mark Gyetvay said, Reuters reported.

But it is the inception of Novatek’s second, and Russia’s third, large-scale LNG project called Arctic LNG 2 that would transform the company, headed by Russia’s richest businessman Leonid Mikhelson, into a top global producer within a decade.

Qatar and Russia have long been rivals in global gas markets. Qatar’s supplies came under the spotlight in the past month after Saudi Arabia cut economic and diplomatic ties, in a move ratcheting up a wider violent and diplomatic conflict in the Middle East.

Russia’s energy industry, meanwhile, has been hamstrung by European and US sanctions over its annexation of Ukraine’s Crimean peninsula, with Europeans particularly sensitive to any potential Russian gas supply cuts in retaliation for political tensions in the region.

In terms of LNG, Qatar is by far the largest exporter, selling 77.2 million tons of the liquefied gas and accounting for just under 30% of market share in 2016, according to energy research group IHS and the International Gas Union.

Russia that year was seventh with exports of 10.8 million tons and a 4% market share. The Yamal project, once all stages are complete, will export an additional 16.5 million tons, which would put Russia in third place just below Australia.

 

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