The European Union takes another step to stifle the Russian war campaign in Ukraine. Now, more than two years after the start of the full-scale invasion, Brussels is putting Russian liquefied gas (LNG) in the spotlight for the first time, which provides Moscow with valuable revenue. The European External Action Service does not propose to prohibit imports to the EU, as is demanded from several fronts, but it does propose their re-export to countries outside the community club, according to the documents to which EL PAÍS has had access.
The measure, which will be debated on Wednesday by representatives of the Member States, could have a significant impact on countries such as Spain, the largest European importer of Russian LNG and also the largest re-exporter in the world. Last year, according to data from the European Energy Regulator (ACER), the EU purchased 18 billion cubic meters from that country. It is 13% of the total.
Although it is very difficult to know the exact fraction that ends up being re-exported, the latest calculations by the CREA study center indicate that 22% of European LNG imports ended up being sent to other countries. 8% of these flows ended up in other community countries other than their initial destination; The rest, according to this environmentalist entity, “although it does not enter the European gas system, it does allow Russia to access global markets, particularly in the Asia Pacific region.”
Big income for the Kremlin
The confidential proposal sent by the High Representative for Foreign Policy of the EU to the Member States and which requires the unanimity of the Twenty-seven proposes to prohibit the provision of refueling services, for the purposes of transshipment operations of Russian LNG, to guarantee that the facilities of the EU are not used to transship that hydrocarbon to third countries. “This covers both ship-to-ship transfers, ship-to-shore transfers and auxiliary maritime reloading operations. Services that facilitate this transportation are also prohibited,” the document reads. This provision, it specifies, does not affect imports within the EU.
“Russia derives significant revenue from the sale and transportation of liquefied natural gas,” the proposal admits. Also with transit, community sources point out, pointing out that the proposal to sanction re-export seeks to attack that point and that the Kremlin and the companies in its orbit have to look for alternative routes, with the corresponding cost.
Until now, the EU has banned the import of coal and oil – with limitations – but had not touched gas because there are Member States that still depend on that hydrocarbon that Moscow has been using for decades as a pressure tool. Although its membership in the EU has been reduced since the invasion.
The plan will also prohibit the import of gas of Russian origin through EU terminals not connected to the European network, new European investments (or supply of products) in the Russian liquefied gas sector. And it will toughen sanctions on Russian ships, in addition to vetoing the entry or use of European ports to ships from that country that “contribute to Russia’s ability to wage war against Ukraine.” A range that can be wide and can include ships with a different, non-Russian flag, which act as a screen.
The 14-pack of sanctions has taken months to come together because it is increasingly difficult to close holes, but it includes 52 new companies and people and dozens of components and materials — chemicals, plastics, minerals, technical equipment — that the Kremlin is using to build weapons . Furthermore, amid Russian espionage scandals and warnings from the EU and NATO that Russia is escalating its campaign to destabilize the Union with tools of hybrid warfare, such as sabotage of infrastructure or taking advantage of its influence agents, the EU will prohibit foundations, think tanks, think tanks and political parties from receiving Russian money.
But the biggest jump occurs with the inclusion of liquefied gas — a very powerful source of income for Moscow, since tube sales have fallen to historic lows — in the sanctioned elements.
Spain, the first European destination and the largest re-exporter
Both in 2023 and in the early stages of 2024, Russia has been the second largest Spanish supplier of Russian LNG, only behind the United States. If fuel arrived by tube and not just by ship is included in the equation, Algeria would relegate the Eurasian giant to third place. The other two major European importers of liquefied gas extracted in Russia are France and Belgium. Both, together with Spain, accounted for 80% of community imports last year, with the ports of Zeebrugge (Belgium), Montoir-de-Bretagne (France), Bilbao (Spain), Gate (Netherlands), Dunkeque (France ) and Mugardos (Spain) as the main entry routes, according to data from the Institute of Energy Economics and Financial Analysis (IEEFA, for its acronym in English).
In 2023, in addition, Spain was the largest re-exporter of LNG in the world: 22.1 terawatt hours (TWh), according to figures from the system manager, Enagás. Shipments by gas pipeline to the rest of Europe – through the Irún and Larrau interconnections – meanwhile increased by more than 6%, to 37.5 TWh.
Once regasified, however, the traceability of the fuel is completely lost and it is practically impossible to know the passport of the molecule that ends up being re-exported by pipeline to other European markets. It is much simpler, however, to know what happens to the LNG stored in the tanks in all the large Spanish energy ports and then loaded onto ships heading to third countries.
If, as more and more agents assume, European sanctions end up going further and end up attacking all imports of Russian liquefied gas, one of the biggest affected would be Naturgy (the former Gas Natural Fenosa), which has had a million-dollar contract since 2013. of supply with the Yamal LNG consortium for which it is obliged to pay for the gas whether or not it ends up bringing it to Spain.
The Spanish third vice president and minister for the Ecological Transition, Teresa Ribera, has recognized on several occasions her desire to “drastically reduce” imports of Russian LNG. However, she used the excuse in January that “we do not have the capacity to impose sanctions or prohibit it.” “What we have done is remind all these institutions that do import gas, that it is more than recommended that they do not sign new supply contracts with a supplier like Russia,” he recalled in reference to the letter sent in March of last year to the main sector players. “There is no express decision at the European level that prohibits imports, so the State does not have the power to impose prohibitions on imports, given that foreign trade is a community competence and sanctions are decided at a European level.” That step has not yet come. But it seems closer every day.
Follow all the information Economy and Business in Facebook and xor in our weekly newsletter
