India says it will not buy LNG from Russia’s sanctioned Arctic project

India will not buy liquefied natural gas from Russia’s sanctioned Arctic LNG 2 project, Indian Petroleum Secretary Pankaj Jain said on Friday.

“We will not buy (supply from) Arctic LNG 2. We are not buying any sanctioned cargo. Something that has broad sanctions, we don’t touch it,” the official told reporters today, as reported by Reuters.

The US and EU have imposed sanctions on the Arctic LNG 2 project, aimed at stifling Russia’s oil and gas revenues.

Located on the Gydan Peninsula in the Arctic, the Arctic LNG 2 project, operated by Russian gas developer Novatek, has been seen as key to Russia’s efforts to increase its global LNG market share from 8% to 20% by 2030-2035 .

But Arctic LNG 2 has been virtually on ice since the US imposed sanctions on the Russian project in November 2023. As a result, foreign shareholders suspended participation in Arctic LNG 2, effectively withdrawing from project financing and offtake contracts for the new plant.

Last month, the US State Department stepped up efforts to derail Arctic LNG 2 exports, targeting companies involved in the development of the project and ships found to have loaded LNG from the facility.

The project has already been delayed for months after US sanctions changed the company’s plans to start production and export timelines.

However, Russia has begun amassing a shadow fleet of tankers to ship its LNG in vessel ownership transfers similar to moves Moscow began after its invasion of Ukraine to create a shadow fleet to export oil and products to the face of Western sanctions.

As India moves away from sanctioned Russian LNG, it continues to seek cheap oil and gas supplies, including from Russia.

India will not change its energy policy to buy oil and gas at the lowest possible price and will continue to buy cheaper supplies of Russian crude, Indian Oil Minister Hardeep Singh Puri told Reuters last week.

“If an entity is not sanctioned, there is no doubt that I will buy from the cheapest supplier,” the minister said.

By Tsvetana Paraskova for Oilprice.com

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