Western sanctions complicate Russia’s plans for a massive increase in LNG export capacity

After Russia cut its pipeline gas deliveries to Europe to just a fraction of their previous levels over the past two years, the country is seeking to focus on expanding its export capacity for liquefied natural gas (LNG). However, Western sanctions will complicate ambitious plans that are intended to make the country one of the world’s largest LNG exporters.

Although Russia currently has the world’s fourth-largest LNG export capacity, it is less than half that of traditional exporters such as Australia, the United States and Qatar. Russia nevertheless plans to significantly increase its capacity in the coming years, which should also help the country replace at least some of the revenue from pipeline exports to Europe that it has lost.

Although Russia increased its LNG deliveries to Europe by 20% year on year last year, they still represent a small share compared with the drop in pipeline deliveries.