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Sanctions Squeeze Russian LNG: Technological Hurdles Threaten Long-Term Viability

ENERGYSanctions Squeeze Russian LNG: Technological Hurdles Threaten Long-Term Viability

Sanctions and technological challenges not only increase costs for the Russian state but also reduce income from gas exports, raising questions about the sector’s long-term profitability and development.

Russian policymakers view the development of the LNG sector as an opportunity to break through the infrastructural and political limitations traditionally associated with pipeline gas transmission. Following the Kremlin’s decisions and the significant loss of the European market share, the search for new export directions, especially in Asia, is filled with uncertainties. Therefore, the expansion of LNG export capabilities seems even more urgent. LNG exports by sea offer greater flexibility in choosing recipients, as the global market allows for directing supplies where there is demand and acceptance of the raw material’s origin.

However, the expansion of Russian liquefaction capabilities and the associated increase in LNG exports face technological hurdles. This is evident in the operating liquefaction plants in Russia, which rely on technologies from Western countries, now difficult to replace with local solutions. An additional problem is the sector’s reliance on methane carriers, especially in the face of sanctions that have prompted foreign shipyards and component suppliers to withdraw from cooperation with Russia or terminate contracts. This may lead to a deliberate reduction in production in new LNG plants due to difficulties in exporting the liquefied raw material.

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