For Gazprom, it has been long time coming.

Even before the shale boom, the economics of the 3.9 trillion cubic metre Shtokman - Putin's flagship energy project - were tenuous at best.

It became thoroughly unsustainable afterwards, especially considering much of the Shtokman gas was destined for the then-growing US LNG markets.

While it is definitely a strategic shocker for Russia, for the other Shtokman partners, France's Total and Norway's Statoil, it is a relief.

It allows them a way to escape the increasing costs of developing the project.

Shell had earlier exited the project.

For Statoil, Shtokman was increasingly becoming a liability. Earlier this month it wrote off a $336.2 million investment, choosing to invest in North American oil and gas projects instead.

Incidentally, Statoil also emerged as the highest bidder, winning the most leases in the latest round of offshore acreage releases in the US.

For Russia, deferring the project really means it is unlikely to be able to dictate global LNG dynamics as the "swing producer".

Its ability to set LNG prices in Europe and more importantly Asia is going to be severely diminished - an outcome that could have been averted had the project been sanctioned.

Industry observers say Shtokman was a one-project ticket that could have catapulted Russia to a dominant position in the global gas market.

As it stands, Russia accounts for less than 5% of the global LNG supply, despite sitting on 30% of global gas reserves.

Shtokman holds far larger reserves than the entire Norwegian continental shelf.

With the growth of Russian LNG exports in doubt, many say it is likely to be relegated to a regional power, holding sway over supplies to peripheral Eastern European countries.

While Russia's stranglehold over European countries is set to ease due to more LNG trade, other traditional gas monopolies such as Qatar and piped gas providers such as Norway are also feeling the squeeze.

With prolific gas discoveries being made in east Africa and Australia hosting seven major projects, analysts say these projects may threaten existing gas monopolies.

Despite the economic downturn, LNG trade volumes were up nearly 10% last year, with global output reaching 240.8 million tonnes.

In terms of physically traded volumes, LNG cargoes worth $250-260 billion were transported last year, accounting for one-third of the gas sold.

LNG is expected to grow at a rate of 6% per year between now and 2020, potentially displacing significant piped gas.

Already, Australia is set to overtake Qatar as the top LNG exporter by end of the decade, shipping more than 60 million tonnes per annum of LNG by 2017 and as much as 100MMtpa by 2020.

The US Geological Survey estimates east African countries Tanzania, Mozambique and Kenya may hold more than 250 trillion cubic feet of gas and together with Australia may become key gas suppliers to Asia.

Asian countries consumed two-thirds of the LNG output last year and given robust economic forecasts in key countries of China and India, that trend is only likely to grow.

While demand from Japan - as it reduces its reliance on nuclear power - is set to grow, China will remain the key consumer.

Already, China has refused to engage with Moscow, declining to sign up for about 70 billion cubic metres of expensive gas contracts on offer from Gazprom.

Its focus is on constructing LNG import terminals and acquiring key gas assets overseas - a trend that will only weaken gas monopolies further.