Because the EU continues to import (a lot) LNG from Russia
In the first nine months of 2022, the European Union increased imports of LNG from Russia by 46 percent. Who are the main importers, what is the economic calculation and what are the risks
Although pipeline gas supplies have shrunk dramatically, the energy relationship between Europe and Vladimir Putin's Russia has been far from disrupted. In fact, in the first nine months of 2022, the European Union imported 46 per cent more Russian liquefied gas (LNG) on an annual basis, according to Commission figures.
PURCHASES REQUIRED, BUT …
Although gas supplies are necessary – the supply of fuel is scarce, and in addition to the impending winter, member states must already prepare for the next one -, POLITICO writes that the continuation of trading relations with Moscow may expose Brussels to others. blackmail by the Kremlin next year, when the continent will have to work again on filling storage for the cold season 2023-2024.
DATA ON IMPORTS
Between January and September 2022, the countries of the European Union imported 16.5 billion cubic meters of LNG from Russia, compared to 11.3 billion in the same period of 2021. This is a modest increase when compared to the collapse of pipeline imports, which increased from 105.7 billion cubic meters in the first nine months of 2021 to 54.2 billion this year.
WHO MATTERS MORE
According to an analysis by the energy research company Montel, the European states that have so far imported the most LNG from Russia are France, the Netherlands, Spain and Belgium. A third of Russian LNG cargoes destined for Europe went to France, and nearly a quarter to Spain.
THE ROLE OF NOVATEK
Most of the Russian LNG arriving in Europe belongs to the Russian energy company Novatek, which operates the Yamal LNG terminal in northwestern Siberia (the French oil company TotalEnergies owns a minority stake).
Unlike state-owned Gazprom, which has a monopoly on Russian gas exports through pipelines, Novatek is formally an independent company. Some of its shareholders, however, are close to the Kremlin, which can therefore "strongly influence its operations", according to a study by Columbia University's Center on Global Energy Policy.
WHO HAS CLEARED PURCHASES
In Europe, only two countries have completely eliminated Russian LNG imports, Lithuania and the United Kingdom. Everyone else should "turn a blind eye" to these flows, Anne-Sophie Corbeau, a researcher at Columbia, told POLITICIAN .
THE ECONOMIC CALCULATION
From an economic point of view, however, Corbeau acknowledges that it "makes sense" for Europe to continue importing liquefied gas from Russia: otherwise it would have to buy it from other suppliers, causing a decrease in world supply (that of Moscow would in fact be removed from the market because not considered) and a subsequent increase in LNG prices, both in Europe and in Asia.
WILL RUSSIA INSTRUMENTALIZE LNG ALSO?
The researcher specifies how, however, the maintenance of energy relations exposes European countries to new blackmail by the Kremlin, which could begin to use LNG as a "geopolitical weapon", similar to how it is done with gas via pipes. Putin's regime could limit or block exports to countries considered hostile (i.e. those that have imposed sanctions on Russia for the invasion of Ukraine) in sensitive periods for supplies or prices.
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This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/europa-gnl-russia/ on Thu, 10 Nov 2022 06:04:58 +0000.