Russian company Novatek, which is the largest producer of liquefied natural gas, has cut prices for its products by 30-40 per cent since August in order to attract buyers from China to purchase gas in defiance of sanctions imposed on the Arctic LNG-2 project. This was reported by Reuters on 19 August, citing an informed source.
“Arctic LNG-2” is included in the sanctions lists by both the United States and the European Union. The Donald Trump administration has repeatedly stated its readiness to impose secondary sanctions or duties on companies and countries that continue to purchase energy resources from Russia or participate in circumventing sanctions.
The Reuters report noted that Novatek had been unable to find buyers for Arctic LNG-2 production before the price cuts in August this year. On 28 August, the first shipment of liquefied petroleum gas was delivered to China at a price, according to an industry source, $3 or $4 per million British thermal units below the market price of $11. This translates into discounts of around 30 per cent or more. Thus, the cargoes are selling for between $28 million and $32 million per shipment, well below the market value of more than $44 million, Reuters notes.
The report does not say which Chinese companies are buying liquefied natural gas from Novatek on these terms.