The upcoming EU ban on the transshipment of Russian LNG at EU ports could disrupt winter supplies from the Yamal LNG project in northern Russia to China and other Asian markets, industry analysts warned, as geopolitical tensions reshape global energy logistics.
The concerns arise as the EU ban on the transshipment of Russian LNG — introduced as part of its 14th sanctions package against Russia, adopted in June 2024 — takes effect on March 27.
The ban on the transshipment of Russian LNG was introduced as the EU’s first sanctions to directly impact the trade flows of the Yamal LNG project in the Gydan Peninsula.
Most of the LNG from the Yamal project is supplied to Europe, but a significant volume is also transshipped for onward delivery to China — the world’s largest LNG importer — which has a vested interest in Yamal LNG.
State-owned PetroChina currently holds a 20-year, 3-million-mt/year LNG supply contract with Yamal LNG, which was signed in 2014 on an ex-ship (DES) basis.
Meanwhile, PetroChina’s parent company, China National Petroleum Corp., holds a 20% stake in the Novatek-operated Yamal LNG project, with the Silk Road Fund holding an additional 9.9%.
The ban on the transshipment could result in more Yamal LNG remaining in Europe at China’s expense.
“This measure clearly appeared to redirect the Chinese offtake portion of Yamal LNG (29.9%) toward demand within Europe,” Daisuke Harada, director of the Energy Business Unit at the Japan Organization for Metals and Energy Security, told Platts, part of S&P Global Commodity Insights.
“On the other hand, China is also influenced by the vector of selling in Europe, where market prices are higher and there are no transportation costs, rather than selling in the cheaper Asian market,” Harada said.
Shipping routes
Yamal LNG relies heavily on seasonal Arctic shipping routes to deliver LNG to Asian markets, including South Korea and Taiwan.
From June to November, specialized ARC7 ice-class LNG carriers can navigate the Northern Sea Route (NSR) directly to Asian markets. However, from December to May, these ships must detour west to European ports for transshipment to conventional LNG carriers, which then sail to Asia.
These transshipped Yamal LNG cargoes, totaling around 2.22 million mt, are estimated to account for about 28% of Russia’s total LNG shipments of 7.81 million mt to China in the year to March 2025, according to Commodity Insights data.
China’s transshipped Yamal LNG cargoes account for around 3% of its total LNG intake during the same period, Commodity Insights data showed.
Russia would need to seek alternative transshipment hubs in non-EU countries or resort to complex ship-to-ship (STS) transfers at sea — both options raising costs and operational risks, according to market sources.
“Russia can deliver Yamal LNG to Asia via STS transfers when the NSR route is closed, ensuring its ability to fulfill long-term contracts with Asian buyers, although costs and operational time will rise,” Lu Xiao, research director for China gas and LNG at Commodity Insights, said.
Reports indicate that the Yamal LNG project resumed STS transfers of LNG near the port of Murmansk in late 2024 to free up ice-class tankers.
Meanwhile, a trade source said Asian buyers may consider reselling Yamal term contract cargoes in the European market and filling the gap by purchasing spot cargoes from other regions to mitigate the impact of the EU ban.
This strategy is feasible, provided Europe is willing to accept Russian spot LNG, another trade source said, adding that Europe may not currently be inclined to do so. “It is more of a political issue than an economic one,” the source said.
Apart from Yamal LNG, Russia’s Sakhalin-2 LNG project also exports LNG cargoes to China via the ice-free Prigorodnoye terminal.
Pipeline gas
Some market sources suggest that China’s current gas inventories are sufficient to absorb temporary disruptions.
“Even if Yamal’s winter shipments face delays, China’s diversified suppliers and domestic reserves are expected to cushion the impact,” a third trade source said.
Since January 2025, Russia has surpassed Turkmenistan to become the largest pipeline gas supplier to China in terms of export value, according to Chinese customs data.
Gazprom, Russia’s state-owned gas company, has increased its gas exports to China to the contractual maximum of the Power of Siberia pipeline since Dec. 1, 2024, one month ahead of schedule, with volumes reaching a new record high on March 3, 2025.
Pipeline gas imports via the Power of Siberia pipeline are expected to reach or even exceed its design capacity of 38 Bcm/year in 2025, up from approximately 30 Bcm in 2024.
Source: Platts
