Quitting Russia LNG proves tough as nation’s exports stay strong

Russia’s liquefied natural gas exports have remained strong since the invasion of Ukraine, highlighting how buyers from France to Japan are reluctant to halt deliveries of the fuel.

LNG exports from Russia in March are roughly on par with daily deliveries a month ago, and are up 10% compared with a year earlier, according to ship-tracking data compiled by Bloomberg. Russia is poised to be the world’s fourth-largest exporter this month, the data showed.

Governments around the world are condemning Russia’s war in Ukraine, but struggle to quit importing its natural gas that is used to power factories and heat homes. While most LNG importers are avoiding additional spot purchases from Russia, they are continuing to accept contracted deliveries of the super-chilled fuel. Russia exports just a small percentage of its LNG to the spot market. 

Sanctions against Russia have largely avoided natural gas, so LNG buyers can keep importing cargoes. A global supply crunch means that importers want all of the cargoes they have already contractually purchased.

So far this month, Japan is the top destination for Russian LNG, despite a noticeable move by utilities to stop purchasing spot shipments from their northern neighbor. 

France is the second-biggest importer of Russian LNG. Paris-based TotalEnergies SE has a minority stake in the Yamal LNG export plant in Russia, and has publicly stated that it won’t exit its investment due in part to security of supply to Europe.

To be sure, about a third of Russia’s LNG shipments are still in transit, and it isn’t immediately clear where they will end up. India and China are expected to continue buying spot LNG cargoes from Russia, according to traders.

Not a drop of Russian LNG was delivered to the U.K. in March. The government banned ports from providing access to Russian ships. And LNG vessels flagged to other nations carrying Russian gas even voluntarily diverted away from the U.K.