SABETTA, Russia: President Vladimir Putin on Friday launched a $27 billion liquefied natural gas plant in the Siberian Arctic as Russia hopes to surpass Qatar to become the world’s biggest exporter of the chilled fuel.
“This is a large-scale project for Russia,” Putin said at the official ceremony in the port of Sabetta on the Yamal peninsula beyond the Arctic Circle.
The centerpiece of the event was the loading of the first gas shipment onto an icebreaking tanker from the Yamal LNG plant, with temperatures of minus 28 degrees Celsius outside.
For the project, Russia’s privately owned gas producer Novatek partnered with France’s Total and China’s CNPC.
The tanker that will carry the first shipment was named after Christophe de Margerie, the former Total CEO who died in an accident on the runway of a Moscow airport in 2014.
White whiskers have been painted on it in honor of the late CEO, who was known for his white bushy moustache.
“I congratulate you all on the first loading of the cargo tanker which is named after our friend Christophe de Margerie,” Putin said, praising him as “one of the trailblazers for this project.”
“At the start of the project, people told me not to pursue this. Those who started this project took a risk but achieved a result,” Putin added, thanking the project’s international participants.
“Without their participation, without them trusting their Russian friends, this project would not have got off the ground — this concerns both the financing and the technology.”
The $27 billion project is set to start with a production capacity of 5.5 million tons per year and increase to 16.5 million tons by the start of 2019.
“Without a doubt Russia not only can but will become the largest producer of liquefied natural gas in the world,” Putin said in March.
“We have everything for it.”
Qatar is currently the world’s biggest exporter of liquefied natural gas.
Russia, the world’s biggest gas exporter, derives a huge share of income from pipeline deliveries to Europe.
With Yamal LNG, the country intends to strengthen its market presence in Asia and demonstrate its capacity to exploit huge Arctic reserves despite major technological challenges.
Dmitry Monakov, the project’s first deputy director, said that producing LNG in permafrost was easier than in warmer climes, an apparent dig at countries like Qatar.
“Nature itself helps us to more effectively liquify gas with the help of such low temperatures,” he told AFP, adding that the plant effectively sat on a gas field so transportation costs were low.
Patrick Pouyanne, Total chairman and CEO, praised the project’s “remarkably low upstream costs.”
“Together we managed to build from scratch a world-class LNG project in extreme conditions to exploit the vast gas resources of the Yamal peninsula,” he was quoted as saying in a company statement.
Despite the project’s completion, Yamal LNG still faces risks, analysts said.
Lussac of Wood Mackenzie said that the coming months will show “whether the plant can operate smoothly in the harsh Arctic environment.”
Transportation through the Northern Sea Route also remains undeveloped, and “its feasibility as a major LNG delivery route is unclear,” he added.
Russia hopes the route will become an easier path to coveted Asian markets, with the LNG project contributing to understanding of how to navigate the Northern Route.
The route along the northern coast of Siberia allows ships to cut the journey to Asian ports by 15 days compared with the conventional route through the Suez Canal, according to Total.
— AFP
Russia looks to overtake Qatar with $27bn LNG project
Russia looks to overtake Qatar with $27bn LNG project
Supply chains reel as carriers halt Gulf routes and impose war risk surcharges in response to Iran-US conflict
RIYADH: Global supply chains were disrupted on March 2 as the US-Iran conflict forced shipping lines and airlines to suspend routes, reroute traffic, and impose emergency surcharges across the Middle East.
As traffic slowed through the Strait of Hormuz and airspace restrictions spread across Gulf hubs, logistics providers halted new container bookings and adjusted operations, driving longer transit times, higher freight costs, and greater uncertainty for cargo owners worldwide.
Ship-tracking data cited by Reuters showed a maritime standstill taking shape near the Hormuz chokepoint, with roughly 150 crude and liquefied natural gas tankers anchored in open waters beyond the strait and additional vessels stationary on both sides, clustered near the coasts of Iraq, Saudi Arabia, and Kuwait, as well as the UAE and Qatar.
Industry guidance warned of heightened naval activity, anchorage congestion and potential insurance volatility, even as no formal international suspension of commercial shipping had been declared.
Rising tensions in the Gulf forced operational pullbacks, with Reuters reporting at least three tankers damaged and one seafarer killed, prompting shipowners to reassess their exposure in regional waters.
Container carriers acted to limit risk, with MSC Mediterranean Shipping Co. suspending new bookings for Middle East cargo amid security concerns and network uncertainty.
A.P. Moller–Maersk paused sailings through the Suez Canal and Bab el-Mandeb and suspended vessel crossings through the Strait of Hormuz, attributing the move to the worsening security situation following the start of the US-Israeli attack on Iran.
Rival operators began diverting vessels around the Cape of Good Hope, extending voyage times between Asia and Europe and tightening effective capacity. The longer routings are increasing fuel consumption and disrupting equipment repositioning cycles, adding strain to already stretched container availability in key export markets.
Freight costs rose further after Hapag-Lloyd introduced a formal War Risk Surcharge for cargo moving to and from the Upper Gulf, Arabian Gulf and Persian Gulf, citing what it described as the “dynamic situation around the Strait of Hormuz” and associated operational adjustments across its network.
The surcharge, effective March 2 until further notice, is set at $1,500 per twenty-foot equivalent unit for standard containers and $3,500 per unit for reefer containers and special equipment.
The surcharge will apply to any booking made on or after March 2 that has not yet shipped, as well as cargo already in transit to or from affected Gulf regions. It will be paid by the booking party and excludes shipments regulated by the Federal Maritime Commission or SSE.
France-based shipping group CMA CGM said March 2 it will introduce an “Emergency Conflict Surcharge,” effective immediately, citing escalating security risks in the region. The surcharge will be set at $2,000 per 20-foot dry container, $3,000 per 40-foot dry container, and $4,000 per reefer or special equipment container.
The measure applies to cargo moving to and from Iraq, Bahrain, and Kuwait, as well as Yemen, Qatar, Oman, the UAE, and Saudi Arabia. It also covers shipments to Jordan, Egypt via the Port of Ain Sokhna, Djibouti, Sudan, and Eritrea, encompassing trade linked to Gulf and Red Sea countries.
On the port side, DP World said operations had resumed at Jebel Ali Port in the UAE following precautionary disruption. The reopening restored activity at the Gulf’s largest transshipment hub, though the broader impact of rerouted vessels, suspended bookings and insurance constraints continues to limit throughput predictability.
Marine insurers added to the strain by issuing notices canceling war-risk cover for vessels operating in Iranian waters and surrounding areas, with changes taking effect on March 5.
The withdrawal of coverage complicates voyage approvals and introduces further pricing volatility for shipowners and charterers considering calls within the region.
Air freight networks have also been affected. Widespread flight cancellations and airspace restrictions across the Middle East disrupted passenger and cargo flows through key hubs, including Dubai.
FedEx said it had temporarily suspended services in specific Middle East markets, including Bahrain, Israel, and Qatar, as well as Saudi Arabia, Kuwait, and the UAE, and halted pickup and delivery services in several Gulf countries due to escalating tensions and airspace closures, affecting time-sensitive shipments across several nations.
Air cargo disruption appears to be significant. Ryan Petersen, CEO of Flexport, a US multinational corporation that focuses on supply chain management and logistics, wrote on X on March 2 that “18 percent of global air freight capacity has been taken out of the market by conflict in the Middle East this weekend,” highlighting the scale of network dislocation as airspace closures and flight cancellations ripple across Gulf hubs.
While the figure has not been independently verified, it underscores the degree to which capacity constraints are tightening for time-sensitive shipments, including pharmaceuticals, electronics and industrial components.
Data from Lloyd’s List Intelligence underscores the scale of disruption to maritime throughput. Daily deadweight tonnage of tankers and gas carriers transiting the Strait of Hormuz fell sharply by March 1, reflecting what industry sources describe as a de facto halt in normal vessel movements.
The combined effect of halted transits, booking suspensions, war-risk pricing measures and air service interruptions is beginning to ripple through global supply chains. Energy exports remain the most immediately exposed given the strategic importance of the Strait of Hormuz, but sectors dependent on just-in-time inventory, from manufacturing to retail, are also facing longer lead times and rising logistics costs.
As of March 2, carriers and freight operators were prioritizing crew safety and asset protection while monitoring military developments. The duration of the conflict will determine whether the current disruption remains a short-term operational shock or develops into a prolonged restructuring of trade routes serving the Middle East.
