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Russia’s Standing in LNG Market

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Hydrocarbon fuels are and will continue to be a primary energy source for some years to come. However, concern for the environment and the need for a more effective use of resources have pushed developed countries to switch from fossil fuels such as coal and oil to natural gas. The latter is considered to be a more environmentally-friendly and economical fuel source since it burns efficiently without emitting as many pollutants.

Natural gas in its gaseous state can be supplied by pipelines. If it cannot reach its destination via such pipelines, special carriers are used to transport its liquefied form.

Liquefied natural gas (LNG), as its name suggests, is a natural gas that has been cooled down by artificial means to its liquid form. In this non-toxic state, it can neither burn nor explode. In addition, when LNG is produced from natural gas its volume decreases by approximately 600 times. Hence, natural gas can be easily stored and transported in its liquefied form.

It is also worth noting that although supplying natural gas via pipelines is cheaper, such means of transporting it has several disadvantages. Delivering gas using pipelines is lucrative when its destination is fairly close to the source of this fuel. China’s West–East Gas Pipeline is the longest in the world (it is more than 8,700 km in length). Construction costs of such projects are enormous and may cancel out any financial benefits of transporting gas in its liquefied form. Moreover, the import / export of natural gas via pipelines limits buyers’ as well as sellers’ options, because they are forced to collaborate with each other even when it ceases to be profitable (otherwise all the money spent on the pipeline would be viewed as wasted). And if a pipeline links two or more countries, the importer-nation may become “a hostage to politics” of the exporter or transit nations who may threaten to stop the supply of gas in order to pressure its........

© New Eastern Outlook