Access to additional LNG volumes that northern frontier provides remain crucial for countries such as India to enhance energy security
Speaking at the Gas Exporting Countries Forum in Moscow on October 27, President Vladimir Putin warned that excluding Russia from global gas markets would raise costs for consumers. He also revealed discussions with potential American partners for exploring cooperation in Arctic gas development. This is happening even as restrictions on Russian energy projects remain in place.
Putin’s remarks come amid continued disruption to LNG supplies. QatarEnergy has extended the suspension of certain deliveries into December, while India’s LNG import bill rose 23% to $8.5 billion during April-September, despite volumes increasing by just 4.4%.
For import-dependent economies such as India, the question is whether prospective Arctic cooperation could eventually expand supply options, or whether sanctions, pricing and transportation constraints will keep that possibility beyond commercial reach.
Arctic gas cooperation meets commercial reality
Russia’s interest in Arctic cooperation extends beyond developing its vast gas reserves. Following Putin’s October 27 remarks, Deputy Prime Minister Alexander Novak clarified that discussions with Washington concerned potential joint development of gas fields and LNG liquefaction facilities, including opportunities involving Russian infrastructure.
Read more The EU is militarizing the Arctic. Here’s how it plans to do itOne possible example has already surfaced. Russia’s Novatek has acknowledged agreements to provide technology for the proposed $25 billion Polar Train LNG project in Alaska. The venture aims to use Russian liquefaction infrastructure for American gas exports, although its implementation remains subject to regulatory approvals.
Russia and the US compete for LNG buyers, yet Arctic development could give their energy companies reasons to work together. Russia could find opportunities to deploy its Arctic expertise and attract investment, while American developers could benefit from technology and infrastructure suited to challenging northern conditions.
Yet commercial interest alone cannot overcome the obstacles facing Arctic LNG development. Washington sanctioned Russia’s Arctic LNG 2 project in November 2023, subsequently extending restrictions to companies and vessels involved in supplying equipment and transporting LNG from the project.
In September, the Novatek-led Arctic LNG 2 project sought approximately $1 billion in damages from South Korea’s Hanwha Ocean in an arbitration dispute over cancelled contracts for specialized ice-class LNG carriers, highlighting the shipping complications facing Russian Arctic gas development.
The regulatory environment remains equally complicated. On October 16, President Donald Trump waived sanctions and tariffs under the Graham Act, but the decision did not automatically remove restrictions imposed separately on Russian LNG projects.
Beyond regulatory approvals, Arctic operations depend on a limited fleet of specialized carriers capable of navigating ice-covered waters. Seasonal conditions further restrict their deployment, making transportation capacity a critical consideration for new projects.
India’s LNG security faces an Arctic test
India’s response to recent LNG disruptions offers an indication of how importing economies may approach future supply arrangements. According to Kpler data for the month of October, the US, Oman and Nigeria accounted for 68% of India’s LNG imports between March and September, against 25% a year earlier. Qatar’s share fell sharply before shipments began recovering this month.
Read more In the Arctic, the ice is moving – and so is the India-Russia agendaIndia’s changing LNG suppliers expose a distinction between diversifying sources and reducing exposure to international prices. With more than a third of its LNG reportedly sourced through spot purchases, Indian buyers remain exposed to price fluctuations even when physical supplies are available. Adding Russian Arctic LNG to India’s supplier portfolio would not necessarily change that exposure unless the contracts offered a different pricing structure or greater protection against international price swings.
The International Energy Agency (IEA) projects India’s LNG requirements could reach 64 billion cubic metres annually by 2030, with the gap between contracted supplies and projected demand widening after 2028.
That gap could influence how Indian importers negotiate their next generation of LNG contracts. Long-term agreements offer greater supply certainty, while shorter commitments provide flexibility when demand or prices change. The balance between them will become increasingly important as India seeks to expand natural gas consumption.
Transport economics add another dimension. Analysis by Reuters in May estimated that shipping LNG from Russia’s Yamal project to India’s Kochi terminal via the Northern Sea Route could cost approximately $3.80 per million British thermal units (MMBtu), compared with $2.60-$2.70 through the Suez Canal using transshipment facilities at Murmansk.
In August, the Indian authorities announced plans for a joint Russia–India pilot voyage along the Northern Sea Route in 2027, alongside a bilateral cooperation agreement that is being negotiated. In September, Russian First Deputy Prime Minister Denis Manturov confirmed these plans, stating in the future, Russian-Indian shipments along the NSR could reach 5 million tons annually.
The proposed voyage could help establish whether the NSR offers practical advantages for India-bound cargoes. For LNG, however, that assessment would require more than a successful transit, including evidence of year-round operating reliability and the costs of deploying specialised vessels.
Asia’s LNG market confronts a new supply equation
China offers an early indication of how Arctic LNG is entering Asian markets despite Western restrictions. According to S&P Global Energy, Chinese imports of Russian LNG increased nearly 25% during January-July 2026, supported partly by discounted Arctic LNG 2 cargoes. Reuters reported in June that Beijing was preparing a second receiving terminal for the sanctioned project’s shipments.
Read more What does India have to do with the Arctic and why is it a test for BRICSMeanwhile, Kpler estimates cited by Reuters on October 22 suggest Asian LNG arrivals could reach 23.31 million tonnes in October, their highest level in three months despite elevated prices.
Yet stronger imports do not necessarily signal sustained demand growth. The IEA reported that Asian spot LNG prices averaged $17.50/MMBtu in the second quarter, up 45% year-on-year, and projected a 0.5% decline in regional gas consumption during 2026 as higher prices encouraged fuel switching and reduced industrial demand.
China’s experience contrasts with that of other Asian importers. On October 1, Britain exempted certain Russian LNG shipments to Japan and South Korea from its sanctions restrictions until March 2028, but only for Sakhalin-2 supplies under existing contracts. India, meanwhile, declined an offer of sanctioned Russian LNG in May, according to Reuters, while remaining open to permitted cargoes. These differences show how sanctions compliance and contractual commitments can shape Asian buyers’ access to Russian gas, regardless of the availability of additional supplies.
Prospective US-Russia cooperation could bring additional Arctic gas into international trade, but new production alone would not redraw global LNG supply patterns. For India and other importing economies, the larger question is whether future projects can offer access on terms that improve their existing procurement choices. The Arctic’s next commercial breakthrough may depend as much on reaching buyers as on producing gas.
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