As winter sets in across the Russian Arctic, Novatek’s ambitious Arctic LNG 2 project is scaling back gas production to align with anticipated reductions in export capabilities. This move comes amid ongoing Western sanctions, early ice formation on the Northern Sea Route (NSR), and a critical shortage of ice-class vessels capable of navigating harsh winter conditions. Despite these hurdles, Russia’s overall LNG exports in 2025 have remained resilient, though the sector faces mounting pressures from geopolitical tensions and seasonal logistics.
The Arctic LNG 2 Project:
A Key Player Under PressureLocated on the Gydan Peninsula in Russia’s Yamal-Nenets region, the Arctic LNG 2 facility is designed to be one of the world’s largest LNG plants, with a planned capacity of 19.8 million tonnes per annum (mtpa) across three trains.
The project, led by independent gas producer Novatek, saw significant progress in 2025, including the addition of a second production train in May.
By September, average daily output reached a record 17.9 million cubic meters, marking a 14% increase from August and signaling a ramp-up despite U.S. and EU sanctions imposed over Russia’s actions in Ukraine.
However, as of November 2025, the plant has begun curbing gas production to avoid stockpiling unsold LNG. Sources indicate that deliveries from Arctic LNG 2 are expected to drop to just 2-3 cargoes per month during the winter season, down from higher rates seen in late summer and early fall.
This reduction is directly tied to shipping constraints, as the influx of cargoes to markets like China earlier in the year already pressured Asian spot prices, with the Platts JKM benchmark falling by 57 cents per million British thermal units (MMBtu) over 10 trading days in September.
Ice-Class Ship Shortage: A Major Bottleneck
A primary factor in the output cuts is the shortage of ice-class vessels, exacerbated by international sanctions. Arctic LNG 2 relies on specialized Arc7 ice-class LNG carriers to transport cargoes via the NSR, which offers a shorter route to Asian markets but becomes treacherous in winter due to thick sea ice.
Sanctions have restricted Russia’s access to these high-tech vessels, many of which were originally built in South Korea and financed by Western entities. As a result, Novatek has turned to a “shadow fleet” of poorly insured, older tankers, but these are ill-equipped for heavy ice conditions.
Early winter ice in 2025 has already halted some deliveries to China, with one shadow fleet carrier struggling through the NSR in November.
This has forced rerouting through ice-free waters like the Barents Sea and even the longer La Perouse Strait, raising costs and delays.
The shortage not only curbs Arctic LNG 2’s exports but also highlights broader vulnerabilities in Russia’s Arctic energy ambitions, which remain “largely frozen” due to geopolitical barriers.
Similar issues have affected Russia’s Arctic oil exports, which fell 4.2% in 2025 due to sanctions and ice hindering shipments.
For LNG, the winter slowdown could reduce Arctic LNG 2’s effective output to a fraction of its potential, despite recent ramps to record levels in October.
themoscowtimes.com
Russia’s Overall LNG Exports in 2025: Volumes, Revenue, and CustomersDespite challenges at Arctic LNG 2, Russia’s total LNG exports have held steady in 2025, supported by established facilities like Yamal LNG. From January to October 2025, exports totaled approximately 26.6 million tonnes, a 3.4% decline year-on-year, according to industry data.
October alone saw a monthly high of 3.4 million tonnes, up 21% from October 2024 and 27% from September 2025, reflecting a late-year surge before winter constraints kicked in.
Earlier in the year, January-August exports reached 18.8 million tonnes, with about half (9.5 million tonnes) directed to Asia.
Revenue from these exports has been substantial, generating around €12 billion from January to October, based on monthly analyses from the Centre for Research on Energy and Clean Air (CREA). This figure accounts for fluctuations in global prices, with daily revenues averaging between €30-52 million across the period.
Key customers in 2025 have included:European Union: Accounting for roughly 49-51% of exports, totaling about 14.5 billion cubic meters (bcm) from January to September, despite a 14% year-on-year decline.
EU imports have shifted amid efforts to reduce reliance on Russian energy, but countries like France saw peaks in early 2025.
China: Representing 21-22% of exports, China has emerged as a major buyer, particularly for Arctic LNG 2 cargoes, dodging U.S. sanctions by designating specific ports like Beihai for shipments.
Japan: Holding 18-19% of the market share, Japan’s imports have remained consistent, supporting Russia’s pivot to Asia amid European reductions.
Other Destinations: The remaining 10-12% includes smaller volumes to countries like Taiwan and India, often via indirect routes.
Converting to volume equivalents, Russia’s LNG exports equate to approximately 35-36 bcm year-to-date (using a conversion of 1 million tonnes ≈ 1.33 bcm), underscoring the sector’s role in funding Russia’s economy despite sanctions.
Outlook: Navigating Winter and Beyond
As winter deepens, Arctic LNG 2’s output cuts could signal broader slowdowns for Russia’s LNG ambitions, potentially impacting global prices if supplies tighten. However, with Novatek continuing to ramp up production at other sites and exploring alternative shipping routes, Russia aims to maintain its position as a top LNG exporter—currently fourth globally.
The ice-class ship shortage remains a critical vulnerability, but the shadow fleet’s adaptability has allowed some resilience.
For the global energy market, these developments highlight the interplay between geopolitics, climate, and logistics. As LNG demand rises in Asia, Russia’s Arctic projects will be watched closely, balancing high potential against persistent challenges.
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