Russian LNG – The Future Geopolitical Battleground

The global natural gas industry is undergoing a historical shift away from overland pipeline deliveries of gas and gradually towards Liquefied Natural Gas (LNG), shipped by seaborne tankers designed to supply distant markets which cannot otherwise be supplied by traditional pipelines. Russia, the world’s largest producer of gas, has stated that it is determined to become a leading player in the emerging LNG business. With the opening of the Russian LNG terminal on Sakhalin Island in 2009, Russia joined the global LNG market. The country’s leadership has stated that LNG will play a significant role in its changing energy strategy and has followed these claims with a number of important steps meant to position its gas monopoly, Gazprom, to become a major player on the world LNG market. Kremlin strategists hope that over time LNG will become just as powerful a tool in its foreign policy goals as pipeline-supplied gas is today. The facts, however, point in the opposite direction and Moscow could well be in for a surprise as their strategic aspirations may exceed their capacity to meet those expectations.