Russia has halted a shipment of liquefied natural gas to an Asian customer due to payment issues with Sakhalin Energy, its new energy operator. It’s the first sign that Russia is starting to withhold natural gas from Asian customers over its energy operations, threatening to blackout some of its most important Asian customers this winter.

According to Bloomberg, two traders familiar with the situation said Sakhalin Energy withheld a cargo of LNG from an Asian buyer due to nonpayment and a delay in signing a revised contract.

Since establishing Sakhalin Energy, a new corporation formed to transfer ownership of Russia’s oldest LNG facility from a Bermudan to a Russian entity, Russia has offered those revised contracts to Asian customers.

If western sanctions cause payment problems, the revisions require LNG buyers to pay in currencies other than the US dollar. However, according to Bloomberg, most Asian customers have yet to sign.

Withholding fuel from Asian buyers may cause problems for North East Asia, which has been stockpiling LNG in preparation for winter. Japan, Sakhalin’s largest buyer, is especially vulnerable to blackouts this winter if shipments are disrupted, as it gets about 9% of its natural gas from the island.

This could also have an impact on Europe, as Asian customers may deplete fuel supplies from non-Russian suppliers, who are already stretched thin as Europe prepares for its own energy crisis this winter.

“Without Sakhalin, North East Asia will have to drag more cargoes away from Europe,” energy analyst Saul Kavonic told Bloomberg. “This will intensify the scramble for gas between Asia and Europe heading into winter, which could send LNG prices to unprecedented levels.”

The price of natural gas in the United States is currently around $9 per million British thermal units, while the benchmark price in Europe has risen to $67 per million BTUs, with the potential to rise even higher if supply continues to tighten.

Don’t forget to follow us on Facebook Instagram Twitter LinkedIn to get the latest updates from Cape Town Tribune

Leave a Reply

Your email address will not be published. Required fields are marked *

Sign Up for Our Newsletters

Get notified of the best deals on our WordPress themes.

You May Also Like

Nikita Mazepin’s Witty Retort To Lewis Hamilton In Formula 1

Lewis Hamilton, The Seven-Time Formula 1 World Champion, Was Not Born Into…

African Health Leaders Pledge To Combat Sickle Cell Disease Ignorance.

Health ministers from across Africa have pledged to raise awareness about sickle…

How Cautious Are you? Eskom Has Suspended Load Shedding in Order For Parliament To Pass Appropriation Bills

Durban – Eskom suspends load shedding on Friday until 5 p.m., permitting Parliament to pass the Property Bill without episode.

The Netherlands Defeated Austria To Book A Place In The Last-16 Of Euro 2020

The Netherlands defeated Austria 2-0 on Thursday The Netherlands defeated Austria 2-0…