Reuters: Novatek sells LNG to China at 30–40% discounts under U.S. sanctions

Novatek, Russia’s largest producer of liquefied natural gas (LNG), has been forced to sell its cargoes to China at discounts of 30–40% due to U.S. sanctions on the Arctic LNG-2 project, Reuters reported on Wednesday, citing market sources.

Arctic LNG-2 began producing LNG in December 2023, but the company failed to sell a single cargo until August 2025. Deliveries only began after Novatek offered steep discounts to Chinese buyers — roughly $3–4 below the Asian LNG benchmark price of about $11 per million British thermal units (mmBtu), one source said.

In subsequent shipments — 14 cargoes since August — Chinese buyers have continued receiving substantial discounts of around 30–40%, according to another source familiar with the contracts.

This implies that each cargo is being sold for $28–32 million, well below its market value of more than $44 million.

The United States has not yet responded to these shipments.

“They are putting pressure on their allies to stop importing Russian gas or LNG. But at the same time, they are not imposing sanctions on Arctic LNG-2,” said Anne-Sophie Corbeau, a researcher at Columbia University’s Center on Global Energy Policy.

• According to recent assessments, China may also be working to build its own shadow fleet for transporting Russian LNG.