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Global LNG market can face supply shortage due to sanctions against Russia — Bloomberg

In addition, new LNG plants under construction in Qatar and the US will not be online for a few years

NEW YORK, June 27. /TASS/. Sanctions against Russia, aging plants and attacks on tanker ships in the Red Sea can lead to a shortage of liquefied natural gas (LNG) on the global market, Bloomberg wrote with reference to a report from the International Gas Union (IGU).

According to IGU, US sanctions against the Russian Arctic LNG-2 project, which forced foreign shareholders to suspend participation in it, as well as a ban on the transit of LNG from Russia in EU ports will lead to global supply disruptions.

"Over the long term, the Biden administration’s licensing pause for new projects could delay more than 70 million tons of LNG per year of new US capacity," the agency said with reference to the IGU report.

In addition, new LNG plants under construction in Qatar and the US will not be online for a few years.

The agency also noted that a quarter of all global LNG production capacity is more than 20 years old, which aggravates the need to replace equipment. Rising demand for the fuel in the Asia-Pacific region and security risks to shipping in the Red Sea are putting pressure on the global LNG supply chain, further increasing the likelihood of shortages.

On November 2, 2023, the US imposed sanctions against the Arctic LNG 2 project of Novatek, and as a consequence the company did not receive ice-class gas carriers ordered in South Korea. On December 12, 2023, the US imposed sanctions against Russian enterprises producing equipment for LNG production, including Northern Technologies, Kazankompressormash and Gazprom Linde Engineering. The EU announced the introduction of restrictions on the transit of Russian LNG through European ports to third countries from the spring of 2025 (after a transition period of nine months), and also prohibited investments, the provision of goods and services for the completion of the Arctic LNG-2 and Murmansk LNG projects.