Russian gas market
Summary
Russian natural gas market is the second largest in the world (after the USA). In 2024, production amounted to 685 bcm, domestic gas consumption - 522 bcm. 76% of the produced gas is consumed in Russia.
Pipeline exports in 2024 amounted to 119 BCM, which is equivalent to 17% of production. Russia's once-gigantic pipeline gas exports to Europe are stagnating due to the US blowing up of Nord Streams in 2022, Poland's suspension of transit and consumption through Yamal gas pipeline, Pribaltica states' refusal of Russian gas import, and Ukraine's blowing up of Sudga gas pumping station in 2025. Supplies to China via the Power of Siberia, to Türkiye via the Blue Stream, and residual supplies to Eastern Europe via Türkiye via the Turkish Stream form the basis of modern pipeline gas exports from Russia.
Russia has 5 LNG projects. 2 of them are operational (Sakhalin-2 and Yamal LNG) and 3 are idle (Artic LNG 2, Gazprom LNG Portovaya, Cryogaz-Vysotsk). As of October 2024, there are also 22 low-tonnage LNG plants operating in Russia, performing the function of regional gas distribution. Preparatory and construction work has begun on two plants: in Ust-Luga and Murmansk region.
Russia is the fourth largest exporter of LNG to the global market. In 2024, LNG exports increased by 4% compared to 2023 and amounted to 47.2 billion cubic meters 30.5 million tons of LNG), which is equivalent to 7% of production. Some of the cargoes produced from Arctic LNG-2 and Gazprom LNG Portovaya are afloat and cannot find a buyer.
After USA and Co’s blowing the Nord Streams, political stoppage of Yamal pipeline by Poland LNG and Ukraine attack to Sudzha gas station, LNG is the key for sustainable Russian gas export. LNG exports has becoming viable for the entire Russian economy, both the fuel and energy complex and the engineering and shipbuilding industries.
The existing political pressure from the United States, the EU and other countries has not yet led to a decrease in total LNG production and exports, but it is already having negative consequences: the shutdown of the first Arctic LNG-2 line immediately after launch in the third quarter of 2024, the shutdown of Gazprom LNG Portovaya and Cryogaz-Vysotsk medium-tonnage Baltic projects, downtime of gas carriers and floating transshipment depots. This pressure also affected the shutdown of the Arctic LNG-2 construction site, the new LNG plant in Ust-Luga and the pause in the construction of the plant in Murmansk.
EU countries (France, Spain, Belgium, the Netherlands) and East Asia (China, Japan, South Korea) dominate the current export portfolio of Russian LNG, reflecting the overall consumer structure in the global LNG market.
Leading companies in the transportation of Russian LNG: Dynagas, Yamal LNG, China LNG Shipping International, Sovcomflot.
Key company of Russian LNG industry is Novatek. Future growth of Novatek now depends on the firm’s capability to establish full scale domestic production for LNG equipment, including liquefaction components and ice-class LNG carriers.
Natural gas production
Production volumes
In 2023, the production volume amounted to 637 bcm. In 2024 gas production reached 685 bcm (+7.6% by 2023).
Russia's gas reserves at the current production level are guaranteed for more than 100 years .
According to the Energy Strategy of the Russian Federation until 2050, published in April 2025, the following indicators of gas production volumes are established:
2030 - 853 bcm.
2036 - 965 bcm.
2050 - 1107 bcm.
Taxes
Natural gas production is subject to the Mineral Extraction Tax (MET).
LNG Plants
Russia has 5 LNG plants:
Yamal LNG of Novatek (port of shipment - Sabetta).
Sakhalin-2 (port of shipment - Prigorodnoye).
Arctic LNG 2 with 1 or 2 trains ready. After start up in 2024 it is idle.
Medium-tonnage plant “Gazprom LNG Portovaya” (port of shipment - Portovaya). As of June 2025 it is idle.
Medium-tonnage plant “Cryogaz-Vysotsk” (port of shipment - Vysotsk). As of June 2025 it is idle.
FID stage has passed two more plants: in Ust-Luga and the Murmansk region.
As of October 2024, there are also 22 low-tonnage LNG plants operating in Russia, performing the function of regional gas distribution. It is planned to build 85 more such plants by 2035.
The creation of an LNG infrastructure is actively continuing in Russia. The government has announced a goal to occupy 15-20% of the global LNG market by 2035. The locomotive of this program is Novatek.
LNG Loadings
In 2023, LNG exports amounted 45 bcm, which is 30.5 million tons of LNG.
In 2024, LNG exports increased by 4% compared to 2023 and amounted to 47.2 bcm, which is 34.2 million tons of LNG.
According to the Energy Strategy of the Russian Federation until 2050, the following indicators of LNG export volumes are established:
2030 - 142 bcm, which is 103 million tons of LNG.
2036 - 179 bcm, which is 130 million tons of LNG.
2050 - 241 bcm, which is 175 million tons of LNG.
LNG production in Russia is stable and withstands moderate pressure from the United States and the EU. However, all new development projects have been put on pause due to the much more critical level of pressure on them from these countries. From a resource, technological and production point of view, Russia (and above all Novatek) is ready to export such volumes of LNG in the long term. At the moment, everything depends on the political willingness of foreign buyers to import Russian LNG.
The table “Monthly LNG loadings volumes at Russian ports“ provides statistics on the loading of gas carriers in Russian ports with aggregation for a calendar month. The data is available from October 2022. 01.MM.YYYY - means shipments for the entire calendar month starting on that day. Shipments for the current month are indicated by cumulative total from the first day of the month to the current date. The delay in receiving data is up to one day. The data is updated automatically.
LNG cabotage is carried out in Russia in relatively significant volumes. They are mainly aimed at reducing the use of ice-class gas carriers in waters that do not require this class. Currently, the main route for such transshipment is the supply of LNG from Sabetta in Yamal with its transshipment at the Murmansk roadstead to gas carriers that do not have an ice class. The giant floating storage facilities “Saam“ and "Koryak”, prepared for similar purposes, are currently idle due to political pressure from the United States, the EU and the UK on the countries that buy Russian LNG.
Before going idle, LNG was also coasted from medium-tonnage projects on the Baltic to Kaliningrad. Some of these volumes were not gasified, and some were transshipped and exported.
The table “Loading of gas carriers in the ports of Russia“ provides the data on loading of gas carriers at gas-liquefying plants in Russia, without detailing by lines. The data has been provided since 13.07.2022 and is updated automatically.
Export destinations
The table “Monthly LNG loadings volumes at Russian ports and destination countries" provides statistics on importing countries of Russian LNG with aggregation dates by calendar months. The date of gas carrier loading is used, the data on importing country is available upon discharge. The data has been provided since 01.09.2022 and is updated automatically. Data for the current month is shown as a cumulative total.
EU countries (France, Spain, Belgium, the Netherlands) and East Asia (China, Japan, South Korea) dominate the current export portfolio of Russian LNG. The supply structure changes every month and depends on the current imbalances of the national gas balances.
Most of the export portfolio is exposed to the risk of sanctions from importing countries, which is potentially an extremely strong risk for Novatek and especially Gazprom. However, the continuing projected shortage of LNG until 2025 creates moderate optimism that sanctions will not be imposed until then.
Historically, Novatek has used Belgium (the Zeebrugge terminal) and France (the Montoire de Bretagne terminal), as well as, to a lesser extent, the Netherlands (the Gateway LNG terminal) for intermediate cargo transshipment from Yamal LNG and its subsequent re-export. The volume of transshipment was about 3.2 - 3.9 million tons per year (on average, 16% of Russian exports). The vast majority of the re-exported volumes from these terminals went to China or were further resold by Chinese commodity traders. On March 26, 2025, the EU ban on transshipment of Russian LNG in EU ports and its further export began to take effect. This EU self-ban does not yet restrict the export of LNG directly to the EU, followed by its regasification at the terminal.
Taxes
LNG exports are not subject to duties.
LNG shippers and LNG carriers construction
Currently, there has not yet been a single shipment of LNG to the final consumer in a foreign country, which makes the situation for Arctic LNG-2 critical.
The largest carriers of Russian LNG:
Dynagas
Yamal LNG (owner of the Yamal LNG plant)
China LNG Shipping International Co
Sovcomflot
The temporary downtime of the first line of Arctic LNG-2, as well as the expectation of low utilization of its operation in the coming years, is due to the unavailability of specialized Ark 7 and Ark 4 ice-class LNG carriers, which were ordered for the year-round export of LNG from Novatek's Arctic projects. These gas carriers are unique and, in fact, their use for other projects will be economically more expensive than conventional gas carriers.
Currently, Russian companies control 23 gas carriers of the Ark 7 and Ark 4 ice classes.
Currently, 7 Ark 7 ice class tankers are under construction.:
Four gas carriers have been built by the South Korean company Hanva Ocean and have already passed sea trials: Peter Kapitsa, Lev Landau and Zhores Alferov (all named after legendary professors of Phystech) and Ilya Mechnikov. Deliveries of these gas carriers are delayed due to US political pressure on South Korea. The owner and operator of the first three gas carriers is Sovcomflot, and the fourth is Mitsui USK Line.
Two gas carriers, Alexey Kosygin and Peter Stolypin, are under construction at the shipyards of the South Korean Samsung Heavy Industry. The estimated availability of gas carriers is summer 2025. The owner and operator of these gas carriers, Smart LNG, is a joint venture between Sovcomflot and Novatek.
Export of pipeline gas
In 2023, pipeline gas exports amounted to 101 billion cubic meters. In 2024, pipeline gas exports increased by 15.6% compared to 2023 and amounted to more than 119 billion cubic meters.
According to the Energy Strategy of the Russian Federation until 2050, the following indicators of pipeline gas exports are established:
2030 - 151 billion cubic meters.
2036 - 197.
2050 - 197.
EU
Russia was the key supplier of gas to EU until 2022. Pipeline supplies reached 400-450 mcm per day. After the blowing up of Nord Streams by US and Ukraine and Poland's blocking of supplies via the Yamal-Europe gas pipeline, supply volumes decreased fivefold to 80 mcm per day.
No one planned to hide responsibility for the explosion of Nord streams at the time of the explosions
As expected, Ukraine and the United States have stopped the transit of Russian gas through Ukraine to the EU from January 1, 2025. Since 2025, Russian exports and the European market have lost pipeline gas in the amount of 41 million cubic meters per day (15 billion cubic meters per year).
For Russophobic reasons, the European Commission requires all EU countries, as well as states planning to join EU, to begin terminating gas supply agreements with Gazprom Export. In Q2 2025 the European Commission presented the following action plan:
Self-restriction of EU countries on conclusion of new supply agreements for pipeline gas and LNG starting from 01.01.2026.
“Termination” of short-term agreements by 17.06.2026.
“Termination“ of long-term agreements tby 01.01.2028 for all EU countries except Slovakia and Hungary.
As of 09.07.2026, this plan has not been agreed.
Since January 2025, Turkish Stream has been the only Russian gas supply channel to EU. In H1 2025, Russian supplies to EU via this route (including re-export of gas outside the EU) amounted to 43 mcm per day, which is 10% of 2021 import volumes. Of these, 21 mcm per day goes to Hungary, 7 - to Slovakia, 15 - to Serbia (including re-exports to non-EU Balkan countries), and 1 - to Greece. Some of physical molecules of Russian gas are likely to enter Ukraine from Hungary and Slovakia as part of Ukraine's commercial imports of European gas.
According to the terms of the agreements, European companies must pay fines for non-taking of gas (take-or-pay clause). The European Commission does not want to pay fines and is looking for ways to sign some kind of paper, according to which unilateral termination of international agreements without penaltieswill be considered “legitimate” in EU. Pocket Stockholm Arbitration Court is likely to be involved in this process. There is already the precedent for “legitimizing” termination of similar contract between Ukraine and Russia without paying contract amount of penalties by Ukraine. This process will finally disconnect EU gas market from supplies from Russia, which will bring additional losses to EU companies and residents and lead to continued stagnation of energy-intensive industries in EU. Even more damage will be carried on by Gazprom. It was gas sales to EU that ensured low level of domestic gas tariffs, as well as Gazprom's generous social program.
Greece
As of 2025, there is a gas supply agreement between Gazprom export and state-owned DEPA (ΔΕΠΑ).
The current agreement with DEPA was signed in January 2022 and is valid until the end of 2026. Previously, there were other agreements between the same parties. The annual volume of supplies under the current agreement is 2 bcm (5 mcm per day). The agreement contains a ”take or pay" condition. The formula price has a basic reference to the TTF index (80% of the price) and oil quotations (20%). In March 2024, DEPA filed to the Stockholm Arbitration Court a standard retrospective price review with Gazprom Export. In July 2025, the parties reached a pre-trial settlement.
Due to the planned general self-restriction of EU in the supply of Russian gas, it is unlikely that this agreement will be renewed.
Türkiye
Russia supplies pipeline gas to Türkiye through two main gas pipelines, the Blue Stream and the Turkish Stream.
Part of the gas (41 million cubic meters per day, 15 billion cubic meters per year) obtained through the Turkish Stream is further supplied to Europe, while Russia retains ownership of this gas. The Turkish route is the only surviving way to supply Russian gas to Europe.
These gas supplies are subject to military attacks from Ukraine and Western European countries.
China
The Power of Siberia is the main export route of Russian pipeline gas to Asia.
It is expected that overall pipeline capacity between Russian and China will increase from 30 bcm in 2023 up to 98 bcm by 2036.
Iran
In January 2025, Russia and Iran agreed on the route of the gas pipeline to the republic through Azerbaijan, negotiations are in the final stage of agreeing on the price of supplies.
Taxes
Exports of natural gas pipelines are subject to a duty.
In 2024, the total receipts to the federal budget of payments for export duties and mineral extraction tax on gas amounted to 1.9 trillion rubles (5.2% of the federal budget revenues of the Russian Federation). After the EU's rejection of Russian gas, the gas revenues of the federal budget of the Russian Federation have dropped significantly.
Ukraine's attacks on Russian gas infrastructure
Russia's LNG infrastructure has been under active attack from Ukraine and NATO countries since the beginning of 2024.
List of attacks:
26.09.2022 - sabotage was committed on the Nord Stream and Nord Stream-2 gas pipelines. As a result of a series of explosions at a depth of 80 meters in the international waters of the Baltic Sea, in the exclusive economic zones of Denmark and Sweden, both lines of the Nord Stream and one of the two lines of the Nord Stream-2 were destroyed. There were a total of 800 million m3 of gas in three pipeline lines at the time of the accident. At the time of the accident, gas transportation was not carried out on them: the Nord Stream was stopped by the Russian side, the Nord Stream-2 was not launched, but both of them were ready for operation.
07.08.2024 - Ukrainian troops have gained a foothold in the town of Sudzha in the Kursk region, including control of the Sudzha gas measuring station. On 03/21/2025, Ukraine blew up the Sudzha gas measuring station, which was occupied at that time.“ On 28.03.2025, after the station was liberated from the occupiers, Ukraine, with the assistance of the United States, Great Britain and France, finished off this station and related infrastructure with a missile strike.
11.01.2025 - In order to stop gas supplies to Europe, an attempt was made to attack the infrastructure of the Russian station in Gay Kodzor, Krasnodar Territory, which supplies gas through the Turkish Stream pipeline. All the drones were shot down.
21.03.2025 - Ukraine blew up the Sudzha gas measuring station, which was occupied at that time
28.03.2025 - Ukraine, with the assistance of the United States, Great Britain and France, finished off this station with a missile strike.
09.04.2025 - the attack of the Ukrainian and EU BLPA on the Korenovskaya compressor station, which provides gas transportation via the Turkish Stream.
Gas consumption
The decline in natural gas exports, both in the form of pipeline gas and LNG, requires and at the same time stimulates the consumption of natural gas within the country.
Consumption volumes
In 2023, gas consumption in the domestic market amounted to 496 bcm. In 2024, gas consumption in Russia reached 522 bcm (+5.2% by 2023). 76% of the produced gas is consumed in Russia.
According to the Energy Strategy of the Russian Federation until 2050, the following indicators of gas consumption in the domestic market are established:
2030 - 560 bcm.
2036 - 589 bcm.
2050 - 669 bcm.
Major projects to increase natural gas consumption:
Gasification of the Murmansk region as part of the construction of the Murmansk LNG and the main gas pipeline leading to it.
Gasification of Eastern Siberia as part of the construction of the Power of Siberia-2 main gas pipeline to China
Gazprom's pre-gasification programs in Russia. Plans for 2021-2025 include 72 regions, 24,000 kilometers of new gas pipelines, 538,000 households, and 3,000 boiler houses.
On April 9, 2025, Gazprom delivered more than 1.217 billion cubic meters of gas to Russian consumers, which was a record for this month. The previous record was set on April 3, 2012, when the volume of supplies amounted to 1.152 billion cubic meters of gas.
Production and export of fertilizers
The use of gas for fertilizer production is increasing. This is a consequence of earlier investments in production facilities and high global gas prices, which stimulate the import of fertilizers from countries with cheap energy. However, the launch of new investment projects in 2024-2025 is hampered by the high key rate of the Central Bank of the Russian Federation (20% as of 06/18/2025).
In recent years, the production and export of carbamide (urea) obtained from natural gas has been growing. About 0.7 billion cubic meters of gas are required to produce 1 million tons of carbamide.
Russian exports of carbamide in 2024 amounted to 10 million tons. This represents 24% of Russia's total fertilizer exports (42 million tons). The largest buyers of Russian carbamide are Brazil (4.1 million tons) and India (1.7 million tons). The main competitors in the international market are the USA and the EU. At the same time, the EU previously re-exported Russian urea in the amount of up to 2 million tons per year. From 1.07.2025, the EU introduced additional restrictions on the import of Russian fertilizers, which forces Russian producers to increase direct exports of urea by sea to end customers.
Production and export of methanol
The production of methanol (methyl alcohol) in 2024 amounted to 3.8 million tons. In 2021, production was 4.5 million tons. It takes about 1 billion cubic meters of natural gas to produce 1 million tons of methanol.
Production capacity in 2025 is -5.6 million tons/year. The capacity forecast for 2030 is 9.2 million tons per year.
The largest producers of methanol in Russia:
Shchelkinoazot (until November 2024, after which production was stopped for economic reasons)
Metaphrax Chemicals
Gazprom Methanol
Tomet
NAC Azot
Nevinnomyssky nitrogen
ANKHK
Akron
Manufacturers are reducing production amid problems with the restructuring of export logistics. There is a product reorientation towards the production of ammonia and nitrogen fertilizers.
Domestic consumption of methanol in 2024 amounted to 2.55 million tons. The main directions of methanol consumption:
Production of formaldehyde and carbamide-formaldehyde concentrate (CFC)
Isoprene production
Production of oxygenates (MTBE, TAME).
Application in the oil and gas industry
By the end of 2024, methanol exports amounted to 1.25 million tons. Exports are declining - in 2023 there were 1.5 million tons, in 2021 - 1.9 million tons. The key factor in the decline is the EU's self-ban on Russian methanol imports. The main export destinations of Russian methanol in 2021 were Finland, Poland, and Slovakia (30 countries in total). In 2024, China (63% share), Turkey (20% share), Belarus (9% share), Kazakhstan (5% share), the United Arab Emirates and Georgia (8 countries in total).
After 2022, the main export route is through the terminal in Nakhodka. The terminal's capacity is 1 million tons per year. In 2024, exports through it amounted to 720 thousand tons. At the same time, until 2022, this terminal was refocused on the export of light petroleum products due to the disadvantage of exporting methanol directly.
Russia is developing a new methanol export infrastructure, in particular, the Vysotsk and Sukhodol marine terminals.
Gas engine fuel
In 12 years, the Russian gas engine market has grown almost 4 times.
The conversion of cars to methane began in 2012. At that time, about 200 CNG stations were operating in the country, and by today their number has increased to 900. The consumption of natural gas as a motor fuel has also increased almost 4 times – from 390 million cubic meters to 1.5 billion cubic meters. Gazprom itself plays an important role in the process of popularizing gas engine fuel: by the beginning of 2024, 15 thousand of the company's vehicles were converted to natural gas, which is 63% of the total fleet suitable for conversion.
In parallel with the conversion of existing vehicles to methane, production of gas-powered models continues: 7 thousand such vehicles were produced in 9 months of 2024. Their conveyor production was launched in Kaliningrad for the first time in Russia; AVTOVAZ, one of the largest manufacturers of vehicles in the country, is increasing the production of natural gas vehicles, and KAMAZ is expanding the range of gas–powered vehicles, working in cooperation with Gazprom: the company creates buses for shift workers, mobile workshops and other equipment.
The gas engine fuel market will continue to develop over the next 10 years. In order for it to be dynamic, it is necessary to solve complex tasks: to develop the refueling infrastructure, including increasing the production of mobile refueling complexes, as well as to carry out a large-scale conversion to economical and environmentally friendly motor fuels not only for automobile, but also for river, railway, and agricultural transport.
Impact of LNG production on domestic market prices
Domestic gas prices and LNG exports from Russia are not interrelated as of 2025.
The gas production, production and export systems of the Yamal LNG and Sakhalin Energy large-capacity LNG plants are independent of Gazprom's Unified Pipeline Network.
The medium-tonnage plants Cryogaz-Vysotsk and Gazprom LNG Portovaya have practically suspended LNG production. Network gas consumption as of the second quarter of 2025 is estimated at 1 billion cubic meters per year (only one of the two Gazprom LNG Portovaya lines is operating).
The theoretical launch of new LNG plants in Ust-Luga and Murmansk may change this situation - the demand for mains gas will amount to 46 billion cubic meters, excluding auxiliary consumption for energy generation and gas transportation. This is equivalent to 9% of domestic demand in 2025, but still less than the available reserve of production capacity.
Exchange trading
Russia is developing exchange trading of natural gas on the domestic market. Exchange trading with physical gas supply is implemented on the St. Petersburg Stock Exchange (formerly the St. Petersburg International Mercantile Exchange).
The volume of exchange trading in natural gas in the first quarter of 2025 amounted to 4.1 billion cubic meters, an increase of 20% compared to the fourth quarter of 2024. Currently, 2.3% of the natural gas produced in the country is sold through the exchange.
Gas prices in Russia are still among the lowest in the world. The quotation of the National Exchange Index of Natural Gas Prices for delivery in April 2025 on the St. Petersburg Stock Exchange (formerly the St. Petersburg International Mercantile Exchange) was 4.65 rubles per cubic meter. This is 10 times lower than wholesale gas prices in Europe and East Asia. This price difference creates significant price advantages for the development of natural gas processing industries in Russia, including the production of methanol and agricultural fertilizers.
Domestic market prices
The final prices of the domestic gas market, primarily for the population, are regulated. As a rule, they are increased annually with a validity period of the first of July each year. Their planned growth will be determined by the FAS based on a review of Gazprom's proposals. The amount of tariff increases is an important component of the country's inflation. Historically, Gazprom has cross-subsidized domestic gas prices at the expense of export earnings. Sales volumes in the domestic market exceeded exports by 2-3 times in physical terms, but they brought in 2-3 times more revenue. Gas exports to Europe in the 2010s were the key not only to the financial well-being of Gazprom Group and the Russian budget directly, but also indirectly to relatively low prices on the domestic market and low utility bills by global standards.
Since 12/01/2022 (in advance of the planned date of 07/01/2023), regulated gas prices for the population and industry have increased. The growth was 8%.
Regulated prices for the population and industry have increased since 07/01/2024. The growth was 8%.
Since 07/01/2025, regulated prices for the population have increased - the weighted average price in the second half of 2025, according to FAS calculations, will be 8 rubles 32 kopecks per cubic meter, compared with 7 rubles 56 kopecks in the first half of the year. The growth is 10.3%. For enterprises of the electric power industry and housing and communal services, the growth will be 21.3%, which equalizes the price for this segment with the prices of industry. Earlier, in 2023-2024, a less significant growth was planned for this date - 8%. Thus, the price increase has become higher than planned. It is worth noting that the inflation target set by the Bank of the Russian Federation is 4%. The key rate as of 07/01/2025 is 20%. Higher gas prices will delay the achievement of the inflation target.
The key reason for the increase is a decrease in Gazprom's cross-subsidization of domestic prices for the population, the electric power industry and the fuel and energy sector due to a drop in export earnings. In part, Gazprom's losses (more precisely, Gazprom Group's gas business, excluding dividends from Gazpromneft and other subsidiaries) are being compensated by other methods, such as selling corporate real estate, reducing excessive costs for sports projects, and reducing the bloated staff of management and administrative staff. Final gas prices continue to be one of the lowest in the world despite all the increases, but gas will cease to be a conditionally free commodity.
Notes:
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