Russian LNG does not go to Asia

Russian LNG exports in January-March increased by 4.3% year-on-year, to 8.7 million tons, but supply dynamics in March were weak – the figure decreased by 1%, to 2.86 million tons. In particular, Russian suppliers were unable to increase supplies to the Asian market, where a significant increase in imports was observed in March due to lower world gas prices. The reason is the lack of free spot shipments, analysts believe.

Russian LNG exports in the first quarter of 2024 amounted to 8.7 million tons, which is 4.3% higher than in the same period last year, according to Kpler data. In March, 2.86 million tons of LNG were exported, which is 1% less than a year earlier.

Of this volume in the first quarter, 3.16 million tons of LNG went to Asia, which is 7% less than a year earlier, to the EU countries – 4.99 million tons, which is 4% more than a year earlier, another 0.55 million tons are not nominated. However, in March, the number of shipments sent to Asia could tentatively decrease by 30% year-on-year, to 0.86 million tons; to Europe, it could increase by 3%, to 1.55 million tons, but another 0.47 million tons nominated.

The pool of main buyers in January-March remained the same: France (1.6 million tons), Spain (1 million tons), Belgium (1.6 million tons), in Asia – Japan (1.67 million tons) and China (0 .78 million tons).

Shipments from NOVATEK’s Yamal LNG project in the first quarter increased by 6.6% year-on-year, to 5.4 million tons. In March, 1.83 million tons of LNG were exported from the plant, which is 5.8% more than a year earlier.

From the Sakhalin-2 site of Gazprom, 2.63 million tons of LNG were exported in the first quarter, which corresponds to last year; in March, shipments amounted to 0.83 million tons, which is 6.7% less than in March last year.

Exports from NOVATEK’s Cryogas-Vysotsk increased by 27% in the first quarter, to 0.22 million tons of LNG. In January-March, Gazprom’s Port LNG shipped 2% less than a year earlier—0.43 million tons.

At the same time, Russian suppliers did not participate in the rapid growth in imports in Asia in March, where lower gas prices led to increased demand. As Bloomberg reported, LNG supplies to Asia in March immediately increased by 12%, to 24 million tons. From Kpler statistics it follows that China imported 21.5% more LNG than a year earlier, India – by 24%, Japan – by 8%, Thailand – by 22%.

Sakhalin-2, which supplies LNG only to the Asian market, in March increased supplies only to Japan – by 28%, to 0.57 million tons, but year-on-year reduced supplies to South Korea (by 60%) and China (by 25%). Russian LNG was not supplied to India and Thailand in March. Yamal LNG also does not show strong dynamics in supplies to the Asian market.

The point is the small number of free spot shipments: almost all of the Yamal LNG gas remains in Europe, while at Sakhalin-2 it is distributed between Japan, South Korea and China, notes Victor Katona from Kpler. “Australia generally has the highest exports to Asia in history in March because they have spot flexibility, and Nigerian LNG entered this market,” he adds.

After a reduction in supplies of Russian pipeline gas to the EU, the continent had to replace these volumes with LNG and the construction of new regasification terminals. Thus, in 2024, additional floating terminals will be introduced in Germany, and a new FSRU in Alexandroupolis began operating in Greece.

Last year, the EU relied heavily on US LNG supplies, importing around 45.6 million tonnes from the country, but Russia remains one of Europe’s top LNG suppliers. Despite this, EU and US authorities are increasing pressure on Russian LNG; in particular, US sanctions are preventing shipments from the first line of the Arctic LNG-2 project just built by NOVATEK.

Tatiana Dyatel