GLNG: Russia’s long-term strategy and a US project scrapped

Russia approved a long-term LNG strategy this week, targeting up to a three-fold increase in production to 140mn tonnes per year (tpy) by 2035.
Several Russian LNG projects are in various stages development, mainly led by Novatek and Gazprom.
Meanwhile, in the US the field of new export terminal proposals continues to thin, with Annova LNG scrapping its project in South Texas this week.
The company cited changes in the global LNG market as its reason for terminating the project, which was one of three proposed for the Port of Brownsville. Annova LNG said that while global supply had increased, demand had not.
The move comes as no great surprise in the sense that not all proposed export projects on the Gulf Coast will go ahead. Additionally, Annova LNG majority owner Exelon had tried and failed to sell its stake in the project, for which no firm offtake deals had been announced up to the point that it was scrapped.
However, industry players and analysts anticipate that demand for LNG will pick up, especially over the medium term as more countries turn from coal to natural gas for power generation. Indeed, Russia’s LNG strategy is based on the assumption that market conditions will improve enough to support new LNG projects over the next 5-15 years.
There is considerable uncertainty over the pace of Russian LNG development, given doubts about how feasible some of the proposed ventures in the country are. Nonetheless, Moscow projects that national LNG output could reach 46-65mn tpy by 2024, rising to 63-102.5mn tpy by 2030 and 80-140mn tpy by 2035.