EU to import record amounts of Russian LNG in 2024

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Russian imports of liquefied natural gas to the EU have reached a record level this year despite the bloc’s attempt to cut the country’s dependence on gas following Moscow’s full-scale war against Ukraine.

Europe imported a record 16.5 million tonnes of Russian LNG in mid-December, up from last year’s imports of 15.18 million tonnes, according to raw materials data provider Kpler. The amount is also higher than the last record of 15.21 million tons imported in 2022.

“What we have seen this year is surprising,” said Ana María Jaller-Makarewicz, an analyst at the Institute of Energy Economics and Financial Analysis. “Instead of gradually reducing Russian LNG imports, we are increasing them.”

Following Russia’s full-scale invasion of Ukraine in 2022, the EU set a goal of stopping imports of any Russian fossil fuels by 2027, but shipments of supercooled gas arriving at European ports have continued to rise.

Unlike pipeline gas imports, which have slowed to a trickle, and Russian oil and coal, which are banned in the EU, Russian LNG imports are still permitted and increasing, in a sign of how a “panicked” Europe is still struggling to quit smoking. cheaper supplies, Jaller-Makarewicz said.

Analysts have pointed to an increase in Russian LNG purchases on the spot market this year: 33 percent of Russian-sourced LNG imports into the EU have been under spot contracts this year, compared with 23 percent last year, Rystad Energy said. an energy consultancy.

Companies such as Shell and Equinor have announced that they will not buy Russian LNG on the spot market. Other traders have said that since the invasion, there are often clauses in contracts for spot cargoes guaranteeing that the LNG “is not of Russian origin.”

However, spot trading this year has increased as traders “can receive cheaper cargoes (from Russia),” said Christoph Halser, a gas analyst at Rystad.

He added that LNG shipped from Russia’s Yamal terminal to Europe was “significantly lower” in price than gas shipped from the United States.

Previously, Europe imported about two-fifths of its gas from Russia, most of which was done through pipelines. Now, total gas imports from Russia, including pipeline gas, only account for around 16 percent of EU gas supplies.

EU officials are convinced that the bloc does not need Russian fuels, even if that means accepting higher prices to buy gas elsewhere.

But Russian LNG accounted for 20 percent of total EU marine fuel imports this year, up from 15 percent last year, ship tracking data shows. Not all of the Russian LNG brought to Europe is consumed in the region, and some is refueled and shipped to other parts of the world.

Volumes to France have increased this year, almost doubling from 2023. More than half of shipments have gone to the Dunkirk import terminal, according to Kpler data.

French energy companies EDF and TotalEnergies, as well as German state energy company Sefe, have terminal use agreements there.

Belgium was the second largest importer of Russian LNG because its port of Zeebrugge is one of the few European transshipment points for LNG from ice-class tankers used in the high north to regular cargo ships. EU governments have agreed to ban these transhipments of Russian LNG from Yamal to non-EU countries, a measure that will come into force in March 2025.

Dan Jørgensen, the EU’s new energy commissioner, has promised to present a plan next year on how the bloc can meet the 2027 goal of abandoning all Russian fossil fuels.

European Commission President Ursula von der Leyen signaled in October that the bloc could increase U.S. imports as a way to placate U.S. President-elect Donald Trump, who has threatened sweeping trade tariffs.

Trump has warned that the EU must commit to buying “large-scale” quantities of American oil and gas or risk facing tariffs.

Additional reporting by Ray Douglas and Daria Mosolova