Liquefied natural gas (LNG) from Russia’s sanction-hit Yamal facility has reached the US for the first time. 

The shipload of LNG departed the Russian Arctic on December 8, 2017 and reached its final destination of Boston on January 28. A recent freeze in New England and the shortage of fuel from gas-rich Pennsylvania have created an appetite for natural gas imports, even from Russia, despite political tensions.

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The US issued sanctions on Russia’s energy sector in July 2014 after President Putin annexed Crimea. The sanctions ban any financing for projects belonging to Novatek, Russia’s largest independent producer of natural gas, but do not prohibit the purchase of LNG that originate from Yamal, most likely because of the facility’s multinational ownership.

Yamal’s main shareholder is Novatek and the $27bn project became operational in 2017, despite sanctions. Chinese energy company CNCP and the Silk Road Fund filled the financing gap by acquiring 20% and 9.9% of the shares, while France’s Total managed to retain its 20% share of the joint venture that began before July 2014.

With the Yamal facility, Russia advances its ambition of becoming a global player in the LNG market by tapping its vast hydrocarbon resources in the Arctic. While Yamal was built to supply the Asian gas market, the first shipment of LNG to the US demonstrates the opportunities LNG provides in terms of supplying global markets.

As part of the Arctic Strategy 2020, the Russian government is actively developing the economic potential of the Arctic territory by licensing drilling and exploration of oil and gas. Sanctions have undermined FDI from Western companies in similar projects, such as ExxonMobil’s plan to partner with Russian oil company Rosneft and spend $550m in the Arctic. Chinese, Japanese and Saudi investors have filled the investment void and teamed up with Novatek and other Russia producers.

Projects such as Yamal create employment, investment opportunities in the LNG sector and new chances for FDI. However, geopolitics are limiting the degree to which Western investors can participate in the lucrative exploitation of resources in the Russian Arctic.