Russian LNG Output Slumps 10% in June
Russian LNG production in June was 10.1% lower than the same month last year, state statistics agency Rosstat reported on July 16, marking the first year-on-year decline in 2020.
Russian LNG output totalled 2mn mt during the month, which also represented a 20.8% fall from the level in May. Production over the first six months of the year was up 7.2% at 15.4mn mt, however.
Russia produced 29.5mn mt of LNG last year, up 47.7% thanks to the launch of Yamal LNG's three 5.5mn mt/yr trains, operated by Novatek, between late 2017 and late 2018. Russia's other main source of LNG supply is the 11mn mt/yr Sakhalin-2 plant in the Far East, managed by Gazprom.
Overall Russian dry gas production came to 48.2bn m3 in June, down 13.3% yr/yr and 8.5% month on month. It totalled 294bn m3 in the first six months of the year, marking a decline of 11.1%. Extraction of associated petroleum gas (APG) stood at 7.4bn m3 last month, down 1.1% yr/yr and 7.2% m/m. Production in the first half came to 48.2bn m3, up 3.7%.
While Rosstat did not disclose reasons for production decline, Gazprom and Novatek have both cut exports in response to the collapse in gas demand earlier this year, triggered by the coronavirus pandemic.
US LNG production is also falling, as spot prices in both Europe and Asia have eroded any profits. This has led to cargoes being cancelled in June and July. However unlike the US, Russian LNG sales contracts are mostly linked to crude oil prices.