India has rejected purchasing liquefied natural gas (LNG) from Russia’s Arctic LNG 2 project, a critical blow to Moscow’s efforts to shift its energy exports after losing the European market.
Concern for US Sanctions
This move, driven by India’s concerns over US sanctions, adds to the growing difficulties Russia faces in maintaining its energy revenue amidst the ongoing Ukraine war.
Pankaj Jain, a key figure in India’s Ministry of Petroleum, confirmed the decision, emphasizing that India is steering clear of any LNG tied to the Arctic LNG 2 project due to the heightened risk of sanctions.
These sanctions have been imposed by the United States in response to Russia’s 2022 invasion of Ukraine, with the aim of crippling Moscow’s war-funding energy exports, according to Ziare.
China Remains Reliable
Russia had hoped to replace its profitable European pipeline gas market, lost due to sanctions and geopolitical tensions, with new LNG exports to countries like India and China.
However, India's refusal, paired with continued challenges in obtaining the necessary equipment and ships due to sanctions, has seriously hindered Russia’s ability to expand its LNG trade.
Despite these setbacks, Russia still aims to triple its LNG exports to 100 million metric tons (about 110 million tons) by 2030, hoping that China remains a reliable buyer. However, with increasing US pressure and the complex logistics of transporting the gas, experts warn that Russia’s energy future looks uncertain.
The US has already begun imposing secondary sanctions on ships involved in transporting Russian LNG, further complicating Moscow’s efforts. India’s decision could significantly impact Russia’s long-term energy export strategy, marking another challenge for the Kremlin’s war-time economy.
