Trump Presidency Could be Good News for Russia’s Arctic LNG Projects, Though Exact Policy Shift Hard to Predict

Even in the face of tightening sanctions Russia has continued construction of its flagship Arctic liquefied natural gas (LNG) project, possibly in preparation of a future shift in U.S. policy after the eventual resolution of the Ukraine War. This shift may come sooner than expected. 

The election of Donald Trump to a second term could provide some relief for Russia’s Arctic LNG 2 plant and other energy projects, a number of experts and industry analysts told HNN in conversations.

“Russia will definitely have more space to maneuver with the Trump administration than they would have had with Harris. It’s too early to tell but given the history between Putin and Trump, and Trump’s own evolving agendas it’s not improbable to see a somewhat loosening stance,” explains Ana Subasic, gas and LNG Analyst at Kpler, a data and analytics firm for commodity markets.

'America First'

While existing sanctions may stay in place, experts speculate, the likelihood of additional rounds of measures in quick succession as has happened throughout 2023 and 2024 will decrease. 

“The new Trump administration's policy regarding Russian LNG may not be to completely relax the sanctions since Trump is all about 'America First' and he'll likely want to ensure that U.S. LNG continues reaching foreign markets in greater volumes (greenlighting new projects etc). However, his administration's approach going forward may be more nuanced,” says Ben Seligman, a project specialist for Arctic oil and gas development.

U.S. Arctic sanctions have been highly specific, targeting individual vessels, quickly changing ownership structures, and mailbox companies reaching from India to the United Arab Emirates. 

Keeping up with these developments and designing effective sanctions requires a lot of manpower and close monitoring, several people familiar with the processes told HNN.

The focus could change under the Trump administration with Russian Arctic LNG activity no longer a top priority in Washington DC.

“Perhaps we won't see someone like Geoffrey Pyatt [Assistant Secretary of State] in Trump's admin vowing repeatedly to kill Russian LNG,” speculates Seligman.

Chinese firms may even feel emboldened to supply materials again or receive cargoes from Arctic LNG 2. 

Trump's relationship with Putin 

Trump may also appear to maintain a tough stance towards Russia, while relaxing some measures in the background.

Ben Seligman is a project specialist for Arctic oil and gas development.

“He'll want to give the outward impression that he will continue efforts to harm Russia's LNG ambitions but behind the scenes, he may also cut the Russians a bit of slack, given his deference to Putin,” surmises Seligman.

Subasic at Kpler agrees.

“Just today Trump went on record saying he will try to “end wars” instead of starting new ones. And the Kremlin made a statement today that they are open for dialogue after a Trump victory,” she confirms.

U.S. LNG ambitions

However, the U.S.’ own LNG ambitions may cloud the picture somewhat.

“All in all, the Trump admin's actions against Russian LNG may be complex, driven by wanting to increase U.S. LNG exports but also by not wanting to upset Putin too much,” concludes Seligman. 

Increased LNG production for export in the U.S. could further depress prices in the long run; a possible challenge for Novatek, the majority operator of Arctic LNG 2, who has been reported to offer significant discounts to attract buyers.

“It’s a wait and see situation. What is clear is that Trump policies favor more gas pumping so it will be a bearish event for markets in the long-term,” affirms Subasic.