Russian firm Novatek PJSC, during a New Delhi energy conference, urged Indian consumers to purchase low-cost Arctic gas, betting on eventual U.S. policy shifts. The $21 billion Arctic LNG 2 project, which was a badge of honor for Russia’s gas dominance, was brought to a standstill by U.S. sanctions, stranding its fleet of LNG tankers.
Novatek executives stated that Donald Trump might negotiate the end of the Ukraine war and lift sanctions. Sanctions historically are difficult to lift, however, and the Biden administration has signaled no loosening without an official deal.
India’s cautious stance
India, which has profited from low-cost Russian oil, was also hesitant to commit to Arctic LNG. While there were huge price inducements, no Indian customers inked contracts, employing legal rather than moral objections.
LNG’s Unique Challenges
Unlike oil, LNG is harder to transport discreetly. Russia’s sanctioned LNG fleet—only ten ships compared to hundreds for oil—has struggled to deliver cargo, with most shipments ending up in Russian storage. The next export window is in late May when Arctic ice melts.
U.S. Competition and Political Uncertainty
Even if sanctions ease, Russian LNG would compete head-on with U.S. exports, now a geopolitical tool. “There is strong enthusiasm for increasing U.S. exports,” said former U.S. Assistant Secretary of State for Energy Geoffrey Pyatt.
Arctic LNG 2 is in the balance, at the mercy of geopolitics. Bookmakers are not keen to make a bet without clear sanctions relief. With summer approaching, the ice and uncertainty regarding Russia’s gas market can maybe begin to thaw—but for now, Novatek’s bid is just that: an offer.
