A Japanese analysis from the nation’s Institute for Energy Economics in Japan (IEEJ) has focused on the rising confrontational stance of the US against Russia and to a lesser extent the hardening of European Union attitudes, resulting in Moscow turning to Beijing to forge closer LNG ties as the possibilities increase for more Arctic liquefaction capacity.
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Biden’s Justice Department released a report on March 16 alleging, without hard evidence, that in the US presidential election in November 2020, Russian government-affiliated parties attempted, but failed, to interfere in US internal politics to support former President Trump under the supposed instructions of President Vladimir Putin.
The next day in a TV interview, US President Joe Biden was asked whether he thought President Putin was a “killer” over the attempted murder by people in Russia of dissident Alexei Navalny and Biden responded, “I do.”
The Biden attack on Putin was reported worldwide. The Russian side retorted that the claim was utterly unfounded and immediately recalled its ambassador from the US.
“Under these circumstances, the world is watching the ties between Russia and China grow stronger,” said the IEEJ analysis of Shoichi Itoh, of the body’sGlobal Energy Strategy Research Unit.
The IEEJ report is entitled: “Russia: Deepening Confrontation with the West and the New LNG Strategy”.
Our photo shows the Arctic LNG II project currently under construction on the Gyden Peninsula by a joint venture led by Russian natural company Novatek.
Other plants?
The latest Arctic project will start producing almost 20 million tonnes per annum of LNG from 2023 and there are more than adequate feed-gas resources in the region for other plants or expansions.
Novatek holds 60 percent of the Arctic LNG II project and four other 10 percent stakes are shared between various shareholders.
They are French major Total, China National Petroleum Corp., China National Offshore Oil Corp. and a Japanese investor group comprising Mitsui & Co. and the government institution, the Japan Oil, Gas and Metals National Corp.
The logistical appeal of Arctic LNG is the Northern Sea Route eastwards from Northern Siberia using ice-breaking LNG carriers to supply import terminals in China, Japan and Southeast Asia.
As US-Russian tensions heighten, the Biden Administration is additionally viewing China as a major national security threat.
The IEEJ report noted that Russian Foreign Minister Sergei Lavrov met with his Chinese counterpart Wang Yi in the Guangxi Zhuang Autonomous Region and released a joint statement fiercely rejecting the West’s demands on human rights and other issues.
LNG ‘politik’
Russian domestic media reported that Russia and China have agreed to halt the expansion of US influence in Europe and Asia.
Then LNG was brought into the diplomatic arena with the Russian government approving a long-term program for developing its LNG production.
“The program provides the outlook for Russia’s production and export of LNG, taking into account the Energy Strategy of Russia for the period up to 2035, and the outlook for the international natural gas market from Russia’s perspective,” said the IEEJ.
The IEEJ report explained that the expansion program sets two scenarios regarding the increase in global LNG demand for 2030, namely the high-level scenario (718 million tonnes/year) and the low-level scenario (421 million tonnes/year), and estimates the annual production of major LNG exporters at 70-90 million tonnes for Australia, 70-140MT for Qatar, 100-300MT for the US and 140MT for Russia.
“The program also estimates the total cost for LNG exports (including production and transport) to the Asia-Pacific region, including China and India where particularly large growth in gas demand is expected, at roughly US$3.7-US$7.0 million per British thermal units for Russia, US$2.8-US$11.0 per MMBtu for Australia and US$7–US$10 per MMBtu for the US,” added the report.
“As the conflict between Russia and the West intensifies, attention must also be paid to how the changing dynamics of international relations may impact Russia’s LNG export policy, and conversely, the possible impact of Russia’s LNG strategy on the international energy situation,” stated the IEEJ.
