The EU's incoming ban on Russian LNG could reduce Yamal project utilisation and add market volatility, reports London's S&P Global.
From January 2027, Russian LNG imports into the EU will be prohibited under new sanctions. Since early 2025, the bloc has imported 11.9 million tonnes of Russian LNG, with 11.7 million from the Yamal project. France, Belgium, Spain and the Netherlands were the main recipients.
Analysts warn that shipping constraints will limit the ability to redirect Yamal volumes to Asia, especially when the Northern Sea Route is closed by ice. Costs to reach Asia-Pacific can exceed $2/MMBtu, compared to 50 cents/MMBtu to reach France.
Longer voyages reduce profitability and limit market availability. Commodity Insights expects lower Yamal utilisation due to shipping capacity constraints.
One producer source estimated up to 10 million mt of LNG could be removed from the market in 2027, potentially pressuring prices. However, global LNG production is forecast to reach 630 million tonnes by 2030.
Demand growth remains uncertain. China cut LNG imports by 9.5 million tonnes in the first nine months of 2025. Analysts say Europe will have spare LNG capacity and do not expect supply security or prices to be significantly affected.
Risks remain in the short term due to project delays, geopolitical tensions and seasonal demand spikes. EU gas storage levels are 12 percentage points lower than last year, adding to potential volatility.
Legal uncertainty surrounds the sanctions. TotalEnergies, which holds a 20 per cent stake in Yamal LNG, is seeking clarity on whether force majeure can be declared. Other offtakers include CNPC, Naturgy and Novatek, which operates the project.
https://www.shippingazette.com/news?news_id=9251100000105
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