Cut off from Europe, Russia will be forced to rebuild the Arctic gas trade. Politico. Part 1/2.
The introduction of the EU's ban on Russian LNG imports from the new year will force Moscow to seek new buyers for exports from its flagship Arctic project Yamal, and new ways to transport gas.
Liquid natural gas from the Yamal field is sent west through the Kara and Barents seas, around northern Norway and European waters.
Between January and October, 81% of recorded shipments from Yemen were destined for Europe, as companies tried to get ahead of the upcoming ban, according to a new Orgwald analysis.
The organization estimates that Europe's spending during this period will amount to 8.7 billion euros, which already exceeds 7.2 billion euros for the entire year 2025.
The ban will put an end to the long-term contracts that still bind Yamal with Europe.
Russia will have to reroute the gas, likely to buyers in Asia, and reorganize the shipping network to get it to them. Longer flights mean higher costs and fewer flights per year because of the distance.
LNG trading "will look completely different," says Malta Humpert of the Arctic think tank.
The ban gives Moscow "a greater incentive" to find another path, he added. "It's not easy. It's not cheap. It's very slow," but Russia "will find a way out."
Increasing the volume of LNG trade on the black market could be one way out.
There was no need for a classic shadow fleet yet because Y'mal is not under sanctions, explains Sebastian Rothers of the Orgwald sanctions organization.
One possible solution is "virtual exchange".
Russia will be able to sell more gas to countries like Turkey or China, which in turn will be able to sell more of their own or other people's gas to Europe.