Russia’s biggest LNG producer and exporter, Novatek, reported on Wednesday a 60% slump in its profit for 2025 from a year earlier.
Profit attributable to shareholders of Novatek plunged to $2.37 billion (183 billion Russian rubles) last year, down from $6.38 billion (493 billion rubles) for 2024.
Novatek said that its normalized profit in 2025 was “significantly negatively affected by one-off non-cash items,” the effect of which amounted to $3.9 billion (301 billion rubles).
The company did not disclose what these one-off non-cash items were.
Last year, Novatek’s Arctic LNG-2 export project started shipments to China as the facility and its sales are under U.S., EU, and UK sanctions and Western customers aren’t buying LNG from it.
The project was sanctioned in 2023 and 2024 as the West was attempting to force a reduction in Russia’s oil and gas revenues that Moscow uses to fund the war in Ukraine.
While Arctic LNG-2 managed to ramp up sales to China, it is constrained by the sanctions and Novatek cannot realize the full potential of the export project on the Gydan peninsula.
Russia and China seem unfazed by the U.S. and European sanctions on Arctic LNG 2 as deliveries continued into the new year.
The project operator, Novatek, has recently started using the Suez Canal route as severe winter conditions have limited access to the Northern Sea Route from Russia’s Arctic to China.
Despite the sanctions, Russia and China have been trading LNG since the first cargo from Russia arrived at the Beihai terminal in China in August last year.
Russia is also keeping its sanctioned LNG trade with China alive during the winter thanks to one ice-class vessel capable of ploughing through the thick Arctic ice.
The sanctioned Christophe De Margerie ice-class LNG tanker exporting cargoes from the Arctic LNG 2 project, vessel-tracking data compiled by Bloomberg showed last month.
By Tsvetana Paraskova for Oilprice.com
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