Russia halts gas deliveries to Asian customers due to payment problems

Russia has begun regulating energy supplies to customers in Asia. New Russian energy operator Sakhalin Energy LLC has stopped natural gas (LNG) deliveries from its Far East facilities to customers. At least 1 in North Asia due to payment problems as well as delay in signing the revised contract.

Russia transfers ownership of the Far East natural gas plant from Sakhalin Energy in Bermuda to Sakhalin in Russia on August 19.

Customers need to comply with the new agreement and make bank payments in Russian rubles since then. These conditions could pose a risk to gas supplies to markets such as Japan and South Korea.

Congestion in natural gas shipments could exacerbate the supply crisis currently facing Asia in the face of rising energy prices and inflation.

Japan could be threatened with power outages this winter if it does not receive electricity supplies from Russia. Japan is the Sakhalin project’s largest gas customer, typically purchasing about 9% of the country’s natural gas needs from the projects.

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