Russian LNG gains traction in China as Arctic LNG 2 deliveries increase

China's LNG import portfolio is seeing a growing share of Russian LNG despite weaker-than-expected gas demand growth in the world's largest LNG importer, supported by discounted cargoes from Arctic LNG 2 and improvements in Russia's shipping capacity, according to customs data, market participants and S&P Global Energy analysis.

The trend is reshaping China's LNG import mix even as overall LNG demand remains subdued and many buyers have yet to begin significant winter procurement.

While China's total LNG imports fell 4.6% year over year to 33.79 million metric tons over January-July, its Russian LNG imports rose 24.9% to 4.23 million mt over the same period, according to Chinese customs data.

China's Russian LNG intake recorded five consecutive months of year-over-year growth from March through July, rising 32.3% in March, 40.9% in April, 10.2% in May, 92.9% in June and 15.6% in July, customs data showed.

The share of Russian LNG in China's import basket rose to about 12.5% over January-July from about 9.5% a year earlier, based on customs data and Platts calculations. Platts is part of S&P Global Energy.

China's growing Russian LNG imports coincided with a sharp pullback in Middle Eastern supply. Qatari deliveries to China fell 55.2% year over year to 4.89 million mt over January-July, cutting Qatar's share in China's LNG import mix to 14.5% from 30.7% a year earlier, according to customs data.

Tighter availability of Qatari and UAE cargoes amid heightened regional tensions encouraged buyers to diversify procurement, said Tianshi Huang, senior principal analyst for China gas and LNG at S&P Global Energy CERA.

Russia was among the main beneficiaries of the sharp decline in Qatari volumes, alongside Malaysia, Canada, Oman and Nigeria, customs data showed.

Arctic cargoes

While market participants are increasingly discussing future Yamal LNG opportunities, CERA data showed that the recent increase in Russian LNG deliveries to China was driven primarily by Arctic LNG 2 rather than a major redirection of Yamal volumes.

According to a recent CERA report, Novatek expanded the fleet serving Arctic LNG 2 more rapidly than expected, adding seven LNG carriers since February. The stronger shipping position led CERA to raise its 2027 Arctic LNG 2 sales forecast by 2 million mt to 7.24 million mt.

China has emerged as Arctic LNG 2's most important outlet after receiving its first cargo on Aug. 28, 2025. According to the report, PipeChina's Beihai terminal had received 2.8 million mt of LNG from the project by the end of July, accounting for more than 90% of the terminal's LNG receipts.

Both Novatek and PipeChina did not respond to an emailed request for official comment from Platts.

Huang said that Arctic LNG 2 had only a four-month effective delivery window into China in 2025. By comparison, the project has had a full eight-month operating cycle in 2026, resulting in substantially higher arrivals.

Arctic LNG 2's faster growth reflects both improved shipping availability and discounted pricing, with Novatek marketing cargoes at about 30%-40% below Asian LNG benchmarks, according to the report.

Yamal volumes

While current growth appears to be driven mainly by Arctic LNG 2, traders said Chinese companies are paying increasing attention to Yamal LNG.

"Many companies in China are looking to secure deals with Yamal because of Europe's [impending] ban on Russian LNG," a Guangdong-based third-tier trader said, adding that they had not heard of any confirmed transactions.

However, traders said it remains unclear how much additional Yamal LNG could ultimately be redirected to China, or how quickly any shift would occur.

According to CERA, the impact of European restrictions on Yamal LNG has so far been limited. CERA recently raised its 2026 Yamal LNG export forecast to 20 million mt, citing stronger-than-expected European purchases and flexibility under long-term contracts.

EU companies holding certain long-term Russian LNG contracts can continue delivering cargoes to non-EU destinations until at least July 2027, Platts reported earlier.

Huang said the potential for incremental Yamal LNG shipments to China remains uncertain, with specialized shipping capacity likely to be the main bottleneck.

Even if Novatek becomes more willing to redirect cargoes to Asia as the European market contracts, substantial growth in Yamal deliveries to China appears unlikely given limited ice-class vessel availability and the inefficiencies associated with long-haul transportation, he added.

Outlook

Several traders said Russian LNG's growing presence in China reflects both improved project logistics and strong price competitiveness.

"Looking ahead to next year, our main concern is the increase in Russian LNG volumes," a Guangdong-based LNG terminal trader said, adding that cheaper Russian cargoes could further pressure domestic prices and make it more difficult for second-tier importers to compete for spot business.

Huang also cautioned that the eventual scale of additional Russian LNG entering China will depend not only on shipping availability but also on broader market conditions.

"If Middle Eastern supply disruptions ease and Qatar and the UAE restore normal export levels, global LNG availability would increase and Chinese buyers would have a wider range of procurement options. That would reduce the relative price advantage of Russian LNG and limit buyer incentives to actively increase spot purchases of Russian volumes," he said.