Russia beating US in LNG price war

26/02/2020 09:52 LNG


Russian LNG’s low price point is putting pressure on its competitors in the European LNG import market, attendees heard at the S&P Global Platts London Oil and Energy Forum yesterday.

“Russian LNG cost into Europe is some of the cheapest LNG in the world. It can get into Europe for under $2/mn Btu,” says Samer Mosis, LNG senior analyst at S&P Global Platts. “Because of this price incentive, Russia became the second-largest supplier of LNG in Europe last year, beating Nigeria and pushing out other key suppliers including Algeria.”


Russia exported 16mn t of LNG into Europe last year, sharply up from 7mn t in 2018. It was behind only Qatar, which exported 21mn t into the market, and ahead of the US, which exported 12mn t, according to S&P Global Platts’ data presented at the event.


Russia’s LNG expansion comes alongside a “volume over value” pipeline strategy that benefits from Gazprom's new electronic sales platform (ESP), according to Mosis. “The ESP has allowed Russia to be very nimble in the way it conducts spot sales—and frankly maintain the market however it wants to.”


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