An aerial view of a LNG tanker. While the EU has seen a significant decline in imported pipeline gas from Russia, the inflow of Russian Liquefied Natural Gas (LNG) cargo at European ports has been increasing (Photo: Venti Views)
The invasion of Ukraine by Russia prompted the EU to wean itself off its dependency on Russian fossil fuels, resulting in an import ban on Russian oil in February 2023 as part of the RePowerEU plan.
However, while the EU has seen a significant decline in the volume of imported pipeline gas from Russia over the past year, the inflow of Russian Liquefied Natural Gas (LNG) cargo at European ports has been increasing.
In essence, Europe is trading one Russian energy source for another.
Official statements from 9 March, 2023, reveal Russia’s plan to nearly triple LNG export capacity by 2030, exceeding 100m tonnes per year. This monumental expansion benefits Russia’s economy but poses a significant threat to the environment due to high methane-emissions in the LNG supply chain.
A recent report by the Institute for Energy Economics and Financial Analysis (IEEFA) revealed that European imports of Russian LNG remained relatively consistent between January and September 2023, compared to the same period in 2022.
Notably, Spain and Belgium increased their LNG imports by 50 percent in 2023 when compared to the previous year. Astonishingly, it is Belgium, France, and Spain that are leading the pack as the primary importers of Russian LNG.
What remains baffling, both to Ukrainians fighting for their country and environmental NGO’s fighting to save the planet, is the fact that terminals in Belgium and France continue to serve as transshipment points for Russian LNG cargoes destined for India and China.
A significant portion of the Russian LNG that passes through EU ports does not make its way to European customers but is instead headed for global markets.
Russia employs specialised “icebreaker” ships to transport LNG from the Arctic to key transshipment hubs. These icebreaker carriers are limited in number and entail higher operational costs compared to their conventional counterparts.
Zeebrugge and Montoir
This transshipment process primarily takes place in the ports of Zeebrugge in Belgium and Montoir in France and is essential for maintaining and expanding Russia’s LNG export capacity.
Zeebrugge’s independent gas infrastructure operator, Fluxys, provides LNG storage and transhipment capacity to “Yamal LNG”, a joint venture with a majority share owned by Novatek, a Russian gas company that is reported to be directly involved in funding military aggression and war crimes in Ukraine.
In 2022, Fluxys terminal in Zeebrugge provided 72 percent of all Russian LNG transshipments in the EU, of which a staggering 93 percent was shipped to non-EU countries.
These concerns were brought to the forefront this month by Ukrainian and Belgian NGOs at a meeting with the ministry of foreign affairs of Belgium and in an open letter signed by 23 Ukrainian NGOs.
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Russia stands to gain between €700m to €800m in tax revenues from LNG exports enabled by transshipments in Zeebrugge in 2023. However, a mere fraction of this gas finds its way to EU markets, raising questions about the justification for the €50m that Fluxys receives annually for this service.
The fundamental question we pose to the Belgian government is whether this substantial revenue justifies their actions. Despite being a regulated entity, Fluxy’s entered into a 20-year €1bn contract with Yamal LNG in 2015. Notably, this deal was inked after Russia’s annexation of Crimea and the onset of the war in Donbas.
At the time, Russian LNG exports were virtually non-existent, and Fluxys contract played a crucial role in assisting Novatek to succeed in realising its expansion plans. Today, LNG exports generate billions in revenue to Russia, enabling the Kremlin to continue funding their brutal war in Ukraine.
Russian LNG exports bring billions in revenue to Russia and help fund the brutal war in Ukraine. The new US sanctions, adopted on 2 November, directly target ARCTIC LNG 2 LLC, the operator of the Arctic LNG 2 project. The US aims to constrain Russia’s energy production and export capacity.
The time has come for the European Commission and key member states equipted with LNG infrastructure to follow the United States lead and take immediate action to halt further expansion of Russian LNG exports.
By aligning forces with the UK and Netherlands, both of which have already banned the essential service at their terminals, Belgium, France and Spain can land a significant blow to the Kremlin by implementing a ban on the transshipment of Russian LNG in European ports. There is simply no justification for these governments not to act swiftly in countering Russia’s expansion in the Arctic.
To maintain consistency with the sanctions policy against Russia and the EU’s climate commitments, the European Commission should expand the list of banned export products, including components, equipment, and software. This will further restrict Russia’s capacity to develop new upstream gas projects and impede its infrastructure development along the northern sea route.
The time to act is now. By breaking free from their reliance on Russian LNG, Belgium, France, and Spain can play a vital role in promoting a future that champions energy security, climate responsibility, and peace.
Source: euobserver.com
