China takes more liquefied gas from Russia. Arctic LNG 2 gains new market and logistics

Chinese imports of Russian liquefied natural gas (LNG) are rising this year despite a decline in the country’s overall LNG intake. The main source of growth is the sanctioned Arctic LNG 2 project, which is being helped by lower prices and the faster expansion of transport capacity.

China imported 4.23 million tonnes of Russian LNG between January and July, up a quarter year on year, while its total LNG imports over the same period fell 4.6% to 33.8 million tonnes. Russian LNG’s share of Chinese imports has thus risen this year to more than 12%, from 9.5% last year.

The shift is driven not only by higher export volumes, but also by a change in Russia’s trading strategy. China is becoming a key market for LNG that Russia, due to sanctions and limited access to Western markets, has to sell at a discount and under more complex logistical conditions.

Further developments will show whether the Chinese market can become a long-term replacement for Europe, or whether it will remain only a limited outlet for sanctioned supplies. The outcome will depend not only on price, but also on terminal capacity, the availability of specialised tankers and Russia’s ability to transport cargoes via individual routes.

China benefits from cheap supplies and Russia from new ships

According to S&P Global, the recent growth in Russian LNG supplies to China has been driven primarily by the Arctic LNG 2 project, rather than by a major rerouting of volumes from the Yamal terminal. Since February, Novatek has expanded the fleet serving Arctic LNG 2 by seven tankers, prompting analysts at S&P Global Energy CERA to raise their 2027 sales outlook by 2 million tonnes to 7.24 million tonnes of LNG.

China received its first cargo from the Arctic LNG 2 terminal in August 2025, and the Beihai terminal had received 2.8 million tonnes of LNG from the project by the end of July this year, accounting for more than 90% of total imports through this terminal. According to S&P Global data, Novatek is offering liquefied gas supplies from Arctic LNG 2 at a discount of roughly 30% to 40% to Asian price benchmarks.

Chinese company PipeChina is also preparing the Longkou terminal in Shandong province, which is expected to offer import capacity of 5 million tonnes of LNG per year after its first phase and could expand the number of locations able to receive Russian supplies.

Europe remains important for Yamal

Rerouting some sanctioned supplies to China does not mean that Russia has replaced European demand. The EU imported nearly 10 million tonnes of LNG from the Yamal terminal in the first half of the year, almost a fifth more year on year. According to estimates by Urgewald, these supplies generated up to EUR 6 billion for the Russian state budget.

EU-wide restrictions have prohibited the conclusion of new short-term contracts for Russian liquefied natural gas since April this year, and are due to apply to long-term contracts from 1 January 2027. Russia is therefore building its own logistics infrastructure. Its shadow fleet of LNG tankers now numbers 25 vessels, having expanded by eight vessels over the previous six months.