![\"Russia's](\"https:\/\/i0.wp.com\/www.marineinsight.com\/wp-content\/uploads\/2025\/11\/lng-tanker-300x157.jpg?resize=300%2C157&ssl=1\")
<\/div>\n![\"lng](\"https:\/\/i0.wp.com\/www.marineinsight.com\/wp-content\/uploads\/2025\/11\/lng-tanker.jpg?resize=1200%2C628\")
Russian liquefied natural gas (LNG) producer Novatek has reduced prices for its Arctic LNG 2 cargoes to attract Chinese buyers, sources familiar with the matter told Reuters.<\/p>\n
The move, with discounts of 30% to 40% since August, has allowed the $21-billion project to finally secure buyers after months of commercial uncertainty.<\/p>\n
The Arctic LNG 2 plant, co-owned by associates of Russian President Vladimir Putin, began production in December 2023 but failed to sell any cargo until August.<\/p>\n
The first cargo, delivered on 28 August, was sold at $3 to $4 below the Asian LNG benchmark price of around $11 per mmBtu, according to an industry source.<\/p>\n
Since then, 14 cargoes have been sold at steep discounts, costing $28 million to $32 million each, below the market value of over $44 million. The identities of the Chinese buyers have not been disclosed.<\/p>\n
The project faced some of the strictest U.S. and European sanctions, imposed to block energy revenues from reaching the Kremlin amid the ongoing war in Ukraine.<\/p>\n
French energy partner TotalEnergies exited the project, while two Chinese firms, China National Petroleum Corp and China National Offshore Oil Corporation, retained their 10% stakes.<\/p>\n
Sanctions also disrupted Russia\u2019s plans to acquire a fleet of Arc7 ice-class LNG tankers for year-round deliveries. Before August, unsold cargoes were left floating or in storage, costing Novatek millions.<\/p>\n
Despite the sanctions, sources said China approved the LNG purchases. Cargoes have been delivered to the Beihai LNG Terminal in southern China, operated by state-owned PipeChina, which has since restricted access to other suppliers, effectively making the terminal dedicated to Russian LNG.<\/p>\n
The UK government imposed sanctions on Beihai in October. China\u2019s foreign ministry declined to comment directly but reiterated its opposition to unilateral sanctions and described Russia-China energy cooperation as \u201cnormal economic and trade cooperation beneficial to both countries\u2019 people.\u201d<\/p>\n
The U.S. has pressured allies to stop importing Russian energy but has not sanctioned Chinese entities involved in Arctic LNG 2 transactions.<\/p>\n
Analysts say sanctioning PipeChina could complicate U.S. LNG exports, as China has not imported U.S. LNG since February 2024 due to trade war tariffs.<\/p>\n