December 1, 2023 [Gas World]- The European Union (EU) has allowed terminals to transship and/or re-export Russian liquefied natural gas (LNG) amidst its attempt to wean itself from Russian gas and LNG since Russia’s 2022 invasion of Ukraine, says the Institute for Energy Economics and Financial Analysis (IEEFA).
According to research from the organisation, there has been an increase in Russian LNG imports and transshipped cargoes arriving at LNG terminals in Europe are often not included in official import figures.
The IEEFA revealed that Spain is the leading importer of Russian LNG among EU countries, with 5.21 billion cubic metres (bcm) imported from Jan-Sep 2023, followed by France (3.19 bcm) and Belgium (3.14 bcm).
According to Kpler, despite France reducing its imports of Russian LNG from Jan-Sep 2023, Spain and Belgium increased theirs by 50% compared to the same period in 2022. The EU imported 18.5 bcm of Russian LNG in 2022 and 13.98 bcm from January to September 2023.
In Jan-Sep 2023, 87% of Russian LNG into Belgium was from Yamal, the rest from Vysotsk, also sent to Greece and Turkey. France’s entire Russian LNG imports were from Yamal, 81% to Montoir-de-Bretagne and the rest to Dunkerque. Spain exclusively received Russian LNG from Yamal during this period.
Transshipments
Zeebrugge’s transshipments of Yamal LNG to Belgium were nearly double the direct imports. Belgium permits transshipment, unlike the Netherlands and the UK. About 90% of Yamal LNG transshipped at Zeebrugge goes to non-EU countries. Transshipment involves ship-to-ship transfer, with Zeebrugge being the only EU terminal offering this service for Yamal LNG.
Fluxys signed a 20-year transshipment contract with Yamal LNG in 2015, and Zeebrugge commissioned a fifth storage tank in 2019. Montoir-de-Bretagne also transships Yamal LNG via ship-to-ship, inherited by TotalEnergies in 2018.
Yamal LNG shareholders include Novatek, TotalEnergies, CNPC, and Silk Road Fund. In Jan-Sep 2023, 37% of Russian LNG received by Belgium and France was transshipped. Volumes to Montoir-de-Bretagne were 50% more than reported imports, with 76% destined for non-EU countries.
From Jan-Sep 2023, Yamal, Vysotsk, and Portovaya terminals sent 17.77 bcm of LNG to the EU, with 21% as transshipments. Despite the REPowerEU plan aiming for independence by 2027, Russian LNG may still be in EU ports.
While France and Belgium transship Russian LNG, Spain increased imports from 4.99 bcm in 2022 to 5.21 bcm in Jan-Sep 2023. Re-exports of Russian LNG from Spain to Italy doubled YoY. EU’s expenditure on Russian LNG in 2022 more than doubled, reaching €16.1 billion ($17.7 billion).
The EU paid €6.2 billion ($6.8 billion) for Russian LNG in Jan-Sep 2023, prompting questions about non-European countries’ payments for transshipped LNG at Zeebrugge and Montoir-de-Bretagne.
In reaction to Russia’s invasion of Ukraine, several European countries implemented methods to increase their LNG capacity and the concerns over energy security.
Key strategies include the expansion of existing LNG terminals to handle larger volumes of LNG, the construction of new LNG terminals and floating storage and regasification units (FSRUs) and diversifying LNG suppliers.
There has also been an increased focus on investing in renewable energy sources such as wind, solar, hydroelectric power, hydrogen, ammonia and biofuels.
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