Attack on Yamal threatens Russia’s gas revenues

Russian war

10 September, 11:46 PM

The recent Ukrainian drone strike targeting Russian natural gas plants near the Arctic Circle “revealed new risks” for the Kremlin and global energy markets, Bloomberg reported on Sept. 10.

“Kyiv’s drones covered a distance of more than 3,200 kilometers (1,990 miles) to hit two plants on Wednesday [Sept. 9] that process a light hydrocarbon called gas condensate into petroleum products,” the news agency wrote.

“The facilities are just south of the Arctic Circle in the Yamal region, where around 80% of Russia’s natural gas is produced.”

The attacks raised concerns in Europe, which continues to purchase large volumes of LNG sources from Russia’s Yamal Peninsula.

“Benchmark prices, already elevated because of the Iran war, rose above EUR80 [$93] a megawatt-hour for the first time since 2023,” Bloomberg said.

Ukrainian company Fire Point, which manufactures the FP-1 drones used to strike at least one of the facilities, said the attack set “a new record for the range of a drone strike.”

“Ukraine has long been expanding its military capabilities to strike deep inside Russia and hit the critical infrastructure that brings significant revenues to its war machine,” the report noted.

“The attacks have mainly focused on oil, curtailing the country’s ability to process and export crude.”

Although Russian gas exports to Europe have declined since Russia’s full-scale invasion of Ukraine in 2022, they still meet about 10% of the continent’s gas needs, according to Bloomberg. Half of that amount comes in the form of LNG, while the rest is delivered through the TurkStream pipeline, which carries gas from fields in Western Siberia to southeastern Europe via the Black Sea.

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