Russia’s Gazprom to Require Rubles for LNG – Interfax
(Reuters) — Russian gas producer Gazprom has proposed expanding its ruble-for-gas scheme for pipeline gas to include liquefied natural gas (LNG), the Interfax news agency quoted a senior manager as saying on Monday.
The proposal from Kirill Polous, a deputy department head at Gazprom, comes after Russia moved to seize operations of the Sakhalin-2 LNG plant last week in retaliation for Western sanctions.
That order, signed by Russian President Vladimir Putin, creates a new firm that will take over all rights and obligations of Sakhalin Energy Investment Co.
Energy firm Shell and Japanese trading companies Mitsui and Mitsubishi hold just under 50% of Sakhalin Energy.
Russia accounts for around 8% of global LNG supply with 40 billion cubic meters of super-cooled gas per year coming mainly from Sakhalin-2 and Novatek's Yamal LNG, Russia's largest LNG plant.
In March, Putin said the world's largest natural gas producer would require countries he termed unfriendly to pay for piped gas in rubles.
A number of Gazprom's biggest clients in Europe were cut off after refusing to abide by new rules.
"This is a question of coordinating pipeline gas exports and LNG," Polous said, adding that there is a foreign exchange competition between the pipeline gas which is sold in rubles and LNG which is taxed in dollars.
Unlike its piped gas sales, the bulk of Russian LNG is consumed in Asia. In Europe, Spain is among the buyers of Russian LNG.
Russia last year earned $7.3 billion from LNG exports, according to the state tax service, comparing to $55.5 billion received from piped gas exports.
Neither Gazprom, nor the energy ministry replied to Reuters requests for comment.
"Pipeline gas trade with European counterparts, unfriendly counterparts, is being conducted in rubles but such measures do not cover LNG," Polous was quoted as saying by Russia's TASS news agency.
Before the recent conflict in Ukraine, which Moscow calls a 'special military operation', Russia had planned to produce as much as 140 million tonnes of LNG by 2035, or a quarter of current global LNG exports.
It has since suggested this target may have to be delayed.
Related News
Related News
- Phillips 66 to Shut LA Oil Refinery, Ending Major Gasoline Output Amid Supply Concerns
- FERC Sides with Williams in Texas-Louisiana Pipeline Dispute with Energy Transfer
- U.S. Appeals Court Blocks Kinder Morgan’s Tennessee Pipeline Permits
- ConocoPhillips Eyes Sale of $1 Billion Permian Assets Amid Marathon Acquisition
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
- U.S. Appeals Court Blocks Kinder Morgan’s Tennessee Pipeline Permits
- Malaysia’s Oil Exports to China Surge Amid Broader Import Decline
- U.S. LNG Export Growth Faces Uncertainty as Trump’s Tariff Proposal Looms, Analysts Say
- Marathon Oil to Lay Off Over 500 Texas Workers Ahead of ConocoPhillips Merger
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
Comments