The Russian Gas Habit Europe Can't Break: LNG

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European leaders have boasted of having reduced their dependence on Russian gas since Vladimir Putin invaded Ukraine. But that’s only part of the truth.

While natural gas supplies delivered by pipeline have fallen dramatically this year, imports of liquefied natural gas (LNG) from Russia to the EU have increased by 46% year-on-year in the first nine months of 2022 , according to figures from the European Commission.

For EU countries, the risk is that the growing use of maritime LNG from Russia will put Europe at the mercy of a new wave of gas blackmail from Putin in 2023, just as the bloc seeks to fill up its gas reserves for the winter.

It is a source of pride for EU officials that countries have reduced their purchases of Russian fossil fuels since the start of the war, as leaders tried to downgrade Kremlin finances. “We need to cut Russia’s revenue, which Putin is using to fund his atrocious war in Ukraine,” European Commission President Ursula von der Leyen said in September.

And while pipeline supply cuts have been drastic – a combination of Russia limiting flows on pipelines and EU countries diversifying their imports – Europe’s small LNG trade with Russia tells a story. different story.

Statistics shared with POLITICO by the Commission show that between January and September 2022, EU countries imported 16.5 billion cubic meters (bcm) of Russian LNG, compared to 11.3 bcm in the same period the last year.

The increase in LNG imports is small compared to the huge drop in Russian gas pipeline imports, which halved from 105.7 bcm in the first nine months of last year to 54, 2 billion m3 in the same period this year, according to Commission figures. But the rise in LNG runs counter to EU rhetoric and is not without inherent risks, energy market analysts said.

France, the Netherlands, Spain and Belgium were the top importers of Russian LNG in 2022, according to analysis by energy market monitoring group Montel, with a third of Russian LNG shipments to the Europe to France and almost a quarter to Spain.

Most of the Russian LNG arriving in Europe comes from energy company Novatek, which operates the Yamal LNG terminal in northwest Siberia, of which French energy giant TotalEnergies is a minority shareholder. Some European countries have long-term agreements to import LNG that still have several years to run.

Unlike the majority Russian state company Gazprom, which has a monopoly on gas pipeline exports, Novatek is an independent company but has “shareholders”. [who] are close to the Kremlin, which can strongly influence its operations,” according to an analysis published by the Center on Global Energy Policy at Columbia University.

Only two countries in Europe – the UK and Lithuania – have completely stopped Russian LNG imports.

Anne-Sophie Corbeau, a global researcher at Columbia, said it was “very convenient for everyone to turn a blind eye to Russian LNG flows” to Europe.

“We need to cut Russia’s revenue, which Putin is using to fund his atrocious war in Ukraine,” said European Commission President Ursula von der Leyen | Frédérick Florin/AFP via Getty Images

In economic terms, Corbeau said, it “made sense” for Europe to continue importing LNG from Russia for the time being. Eliminating Russian LNG from the EU market would mean that European countries would buy more LNG from elsewhere in the world, driving up prices for poorer countries in Asia.

“The prices would be stratospheric and it would be extremely bad not only for Europe but also for many countries which could not afford [LNG]said Raven.

But she added that increasing imports of Russian LNG increased the potential for “Russia to use LNG as a geopolitical weapon” – just as it did with the pipeline. Putin could potentially block exports to “unfriendly” countries while continuing to provide a lifeline of gas to poorer states in Asia suffering from severe energy shortages.

Such a move could have consequences for the EU in 2023, amid fresh warnings from the International Energy Agency that Europe could face a gas supply shortfall of up to 30 bcm. during next summer’s storage season.

Svitlana Romanko, director of the Ukrainian campaign group Razom We Stand, which is pushing for a full EU embargo on Russian fossil fuels, said there was a clear moral case for abandoning Russian LNG imports.

“While the EU talks harshly about sanctions and embargoes, the reality is that very little is being done to reduce LNG imports,” Romanko said. “Europe must act now and stop this absurd and counterproductive funding of the Russian war machine.”