Putin proposes Arctic energy cooperation to US to ease gas sanctions

Following a diesel arrangement with the US and the prospect of expanding Russian fertiliser shipments, Moscow is offering Washington joint cooperation in the Arctic.

Russian President Vladimir Putin announced that Moscow is considering the possibility of working together with US partners in the Arctic region.

Speaking at the Gas Exporting Countries Forum (GECF) summit, Putin described the regional situation:

“We are actively working in the Arctic, which I mentioned, with many countries around the world, and we are interested in joint work. Until very recently, our European partners and our Chinese partners were working alongside us at our fields. Now we are considering the possibility of joint work with American partners.”

So, which fields could a partnership between the two countries in the Arctic encompass, and what could Moscow offer Washington in exchange for lifting sanctions on Russian gas? Liquefied natural gas (LNG) projects stand at the heart of the matter.

European companies pulled out of Russian gas projects such as Yamal LNG and Arctic LNG 2 due to sanctions imposed on Russia after 2022.

According to Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation and the National Energy Security Fund (NESF) who spoke to the Vzglyad newspaper, cooperation with Chinese companies moved to a new dimension following the departure of the Europeans.

Two Chinese shareholders, CNPC and CNOOC, are involved in the Arctic LNG 2 project. Initially, both companies froze their participation out of concern over US sanctions targeting the venture.

Mikhail Vakilyan, an expert at the Institute for the Development of Fuel and Energy Complex Technologies, told Vzglyad that Beijing did not alter its policy, but rather that Chinese firms CNPC and CNOOC simply did not want to risk their access to the US dollar.

Yet, a year and a half later, the picture shifted entirely. In the second half of 2025, China began purchasing gas from the sanctioned Arctic LNG 2 facility and dedicated a standalone terminal to the project.

Furthermore, it opened a second terminal this year serving exclusively Russian LNG.

China even resumed module deliveries needed to complete the third train of Arctic LNG 2, despite having halted shipments previously.

Moscow seeks markets and turbines, offering technology for Alaska

Despite all these developments, Russia’s expectations from the US in the Arctic remain clear. Mikhail Vakilyan summarised this requirement:

“Russia needs two things: first, markets; and second, hardware. Lifting sanctions on Arctic LNG 2 and its gas carriers will bring back buyers in Japan, India, and South East Asia, eliminating the discount currently enjoyed by China as the sole customer. As for hardware, the turbines driving the liquefaction compressors at Yamal LNG and Arctic LNG 2 are manufactured by the US company Baker Hughes. Maintenance, spare parts, and modernization for these machines are blocked by US export bans.”

Igor Yushkov viewed the process through the lens of a political and economic trade-off:

“The exact same scheme seen in the diesel agreement is operating here. In exchange for easing anti-Russian sanctions and putting pressure on Ukraine, we are offering the US mutually beneficial projects and broader economic cooperation. We are showing that this cooperation can be versatile across various fields such as diesel, fertilisers, LNG, and similar sectors.”

The tangible offer Russia could present to the US in the LNG sector in exchange for sanctions relief is technological support for an LNG plant to be built in Alaska, referring to the $25 billion Polar LNG project.

Yushkov explained the card held by Russian energy company Novatek:

“Novatek possesses a technological solution applied at Arctic LNG 2 that would also suit the LNG project in Alaska. These are reinforced concrete gravity-based structures carrying liquefaction equipment; essentially floating LNG factories. Novatek has already built two such platforms alongside their equipment and established an offshore super-structure construction centre in Belokamenka. The issue is that both this centre and the Arctic LNG 2 plant itself fell under US sanctions. Therefore, in exchange for lifting sanctions at least on the super-structure construction centre, we could build such a facility for Alaska.”

According to the expert, Russia could cast the reinforced concrete platform at this centre in Belokamenka, install the LNG plant atop it, and tow it to Alaska once completed.

Because building from scratch in the Arctic itself is both costly and creates constraints regarding time and equipment transport, this method offers a much simpler solution.

Nevertheless, Yushkov warned that the plan is not finalised:

“Owing to numerous sanctions-related issues and questions surrounding the project’s economics, it is not certain this scenario will materialize; however, the Americans are still interested in our technologies for Alaska, and Russia is stating it can capitalize on this and deliver it.”

Conversely, Yushkov recalled that Russia remains the primary rival to the US, particularly in the gas sector, and that the US administration has systematically squeezed Russian gas out of the European market in recent years.

According to the expert, helping US LNG capture the market share lost by Russia is hardly a brilliant idea.

Europe’s 2027 ban, China price talks, and rare earth metals

Arctic LNG 2 is not the only Russian project that could benefit from potential cooperation with the US; a new opening could also emerge for Yamal LNG, which is unaffected by US sanctions.

The crux here is not sanctions, but the European Union’s upcoming ban on all Russian LNG shipments starting from 1 January 2027.

Vakilyan explained the approaching risk and a potential solution using figures:

“In the first half of the year, Europe took nearly the entire output of the plant, amounting to 9.89 million tonnes. In two months, these volumes will need a new route and a new buyer; a US trading company appears very well suited for this role.”

Another winner in the equation could be Gazprom, which is conducting negotiations with China for the Power of Baikal pipeline, formerly known as Power of Siberia 2.

Vakilyan said: “Cooperation with the US is Russia’s trump card in price negotiations. China has long negotiated with Gazprom assuming Russian gas has nowhere else to go; an American company in the Arctic would disrupt that calculation.”

Viewed from a wider perspective, Russia and the US share two additional points of contact: oil projects and rare earth metals.

The Vostok Oil project, which awaits the lifting of sanctions on Rosneft, is the first among them.

Vakilyan listed the other areas:

“It is impossible to make headway on the Pobeda shelf, which could not be developed since 2014, without the Americans; that site requires subsea production complexes and drilling services in icy seas, where US companies are strongest. Another issue not apparent at first glance is rare metals. The Trump administration is seeking them across the globe, and Tomtor, one of the largest rare earth metal deposits, lies in the Arctic region of Yakutia.”