Russia Ratifies New LNG Agreement with China
Moscow has ratified a new liquefied natural gas (LNG) agreement with Beijing, further solidifying energy ties between the two countries. The deal underscores the ongoing realignment of global energy markets and strategic partnerships.
- This agreement strengthens the existing partnership on the Yamal LNG project, a facility in the Russian Arctic with an annual production capacity of 16.5 million tons. - Chinese companies already hold a significant stake in the Yamal LNG project, with CNPC owning 20% and the Silk Road Fund holding 9.9%. Novatek, Russia's largest LNG producer, holds the majority share of 50.1%. - The deal comes as the European Union is set to ban all imports of Russian LNG, with long-term contracts ending by January 1, 2027, forcing Russia to find alternative markets for its gas. In 2025, Russia's share of EU gas imports (pipeline and LNG combined) had already dropped to about 12% from around 40% in 2021. - Russia is also developing the Arctic LNG 2 project, in which Chinese companies also have a stake, though this project has been hampered by international sanctions. In 2025, China received 21 LNG shipments from the sanctioned Arctic LNG 2 project. - This LNG cooperation is part of a broader energy relationship that includes the massive Power of Siberia pipeline, which has been operational since 2019. - A second major gas pipeline, the Power of Siberia 2, is under negotiation and would transport gas from the Yamal peninsula through Mongolia to China, further solidifying Russia's pivot to Asian energy markets. However, a final agreement on pricing has remained a key sticking point in the negotiations.
