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The European Union has replaced its dependence on one form of Russian gas with another. Instead of receiving pipeline gas from Russia from the east, Europe is currently using Russian LNG imported into western ports.
Although the EU has neither sanctioned nor banned Russian natural gas, Russian LNG imports have skyrocketed since Russia’s invasion of Ukraine and a significant drop in Russian pipeline flows in 2022.
The bloc is the largest buyer of Russian LNG, although the volumes are not as large as the pre-war pipeline gas flow from Russia to Europe. The EU will buy almost half of Russia’s total liquefied natural gas exports in February 2024, and China will buy Russia by a wide margin, according to the latest data on Russia’s fossil fuel exports compiled by the Energy and Clean Research Center. It was shown that Japan purchased 21% of the total LNG export volume. Air (CREA).
More than a tenth of former Russian pipeline flows to the EU have been replaced by Russian LNG imported to ports in Western Europe, mainly Spain, Belgium and France, according to a Reuters data analysis. .
Changes in Russian gas flows are expected to change, with pipeline supplies slowing to a trickle and likely to decline further with the end of the agreement to transport gas through Ukraine at the end of 2024. It shows that LNG accounts for at least part of Moscow’s lost pipeline. export. It also shows that Europe cannot afford to phase out Russian gas at this point, at least until it can ensure the security of its energy and gas supplies to avoid another energy crisis.
The fact that, two years after Russia’s invasion of Ukraine, there is no ban on pipeline gas or LNG imports from Russia is a sign of caution in order to avoid soaring prices and a repeat of the energy crisis in 2022. It shows concern about the loss of EU gas supplies.
The EU has set a non-binding, indicative goal of eliminating Russian gas by 2027.
EU officials have called for concerted action to reduce LNG imports from Russia, and no individual countries have moved to ban them.
LNG import boom
The EU’s LNG imports from Russia are at an all-time high since Russia cut off pipeline gas from some EU member states in the spring and summer of 2022 and the Nord Stream pipeline exploded in September of the same year. The number has increased rapidly over the past two years.
EU ports imported 15.6 million tonnes of Russian LNG last year, according to estimates by data analysis firm Kpler cited by Reuters. This is slightly higher than in 2022, but increased by 37.7% compared to pre-war imports in 2021.
According to EU statistics, pipeline gas imports from Russia have fallen to less than 9% of EU gas supplies, up from more than 35% previously, but Europe’s imports of Russian LNG have increased Russia’s share of EU gas supplies. The proportion of gas rose to about 15%. and Reuters calculations.
According to data compiled by the Institute for Energy Economics and Financial Analysis (IEEFA), LNG supplies from Russia to Europe will increase by 11% from 2021 to 2023, while supplies to Spain will double and supplies to Belgium will increase by 11%. The amount has more than tripled.
The European terminals that imported the most Russian LNG between 2021 and 2023 were Zeebrugge in Belgium, Montoire de Bretagne in France, Bilbao in Spain, Gate in the Netherlands, Dunkirk in France, and Mugardos in Spain. According to IEEFA’s analysis, this was the case. Kpler data shows.
According to CREA’s analysis of February 2024 data on Russia’s fossil fuel exports, imports, especially in Belgium, are largely re-exported to Spain and China.
“Belgium’s total LNG imports increased by only 4% in February, but imports from Russia increased significantly by 44%. At the same time, Belgium’s LNG re-exports increased significantly by 81%. “It was shipped to Spain and China, indicating the country’s role in transshipping Russian gas around the world,” CREA said. Stated.
IEEFA also pointed out that at the end of last year, around 21% of Russia’s LNG volumes destined for the European Union were transshipments, which are not included in official import volumes and are therefore ignored by EU policymakers.
It is unclear how the EU will deal with LNG imports from Russia
Belgium is considering ways to tackle the transshipment issue without jeopardizing Europe’s supply security, a spokesperson for the Belgian Energy Ministry told the Financial Times in November.
Spain’s Energy Minister Teresa Rivera told Bloomberg in an interview last month that Spain was also seeking stricter EU-wide coordination on the handling of Russian LNG imports.
The EU will soon allow individual member states to block LNG imports from Russia without imposing sanctions by restricting Russian gas’s access to their own gas systems.
However, Rivera said Spain wants the EU to allow member states to block such imports without the cargo being diverted to neighboring EU countries.
“What if I unilaterally ban it and it extends to France?” Rivera told Reuters.
EU Energy Commissioner Kadri Simson is calling for action at an EU-wide level.
“We have reiterated that Russia cannot afford to compensate through the LNG channel for some of the volumes it has cut through pipeline exports due to unilateral decisions,” Simson said last month.
How can the EU achieve this in the short term without disrupting the gas market, as prices have fallen to pre-war levels and the EU survived the winter with record amounts of gas in storage? Not sure.
Written by Tsvetana Paraskova, Oilprice.com
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