Europe’s imports of Russian seaborne gas jump to record high | Popgen Tech

Europe is importing a record amount of seaborne Russian gas, underscoring how the region has not completely shed its dependence on the country for the crucial fuel, even as flows through pipelines have all but stopped.

Imports of Russian liquefied natural gas, typically transported in large tankers, rose more than 40 percent between January and October this year compared to the same period in 2021, underscoring the difficulty for Europe to wean itself off gas from Moscow at despite Brussels’ trying to move away from Russian sources.

Russian LNG accounted for 16 percent of European seaborne imports during the period. While the total volume of 17.8 billion cubic meters represented a fraction of the 62.1 bcm pipeline gas flow during this time, it nevertheless leaves Europe exposed to Vladimir Putin’s weaponization of energy.

“One day Putin could wake up and say, ‘we’ll stop sending LNG to Europe,’ forcing the region to buy from an even more expensive spot market,” said Anne-Sophie Corbeau, global research scientist at the Center on Global Energy Policy at Columbia University.

Russia could also divert the cargoes to LNG-starved countries such as Bangladesh and Pakistan at cheap prices to “make political gains” and “put pressure on Europeans”, she added. “It is very important not to forget that many countries are suffering because they cannot afford VNG.”

There are no sanctions against Russian gas, due to its importance to some European countries’ energy security. The Kremlin took advantage by gradually reducing flows through pipelines after the invasion of Ukraine, raising prices and fueling a continent-wide cost-of-living crisis.

Gas flows through the Yamal pipeline, which runs through Poland, have been halted since May, and Russia is cutting flows through the Nord Stream 1 line to Germany in the summer. The pipeline later burst, in what some European countries claimed was a deliberate act of sabotage.

Russia has also recently threatened to cut off supplies to Western Europe through the only pipeline that still connects the region through Ukraine. Pipeline gas from Russia is down almost 80 percent compared to the same period last year, according to data from think tank Bruegel.

To fill the gap, Europe, which last year imported 155 bcm of Russian natural gas, including LNG, turned to the international LNG market. It imported a record 111 bcm of LNG globally between January and October, data from Refinitiv showed, an increase of nearly 70 percent year on year.

Imports from Russia totaled 17.8 bcm during the period, up 42 percent compared to the same period in 2021, with France, Belgium, Spain and the Netherlands accounting for almost all of the volumes.

Most Russian LNG comes from the Yamal LNG joint venture, which is majority owned by Russian company Novatek, with other interests held by France’s Total, China’s CNPC and a Chinese state fund. Slightly less than 10 percent of Novatek shares are owned by Russia’s state-owned Gazprom.

In another sign of Europe’s ties with Russia, a large ship carrying LNG from the Portovaya facility near Russia’s southern border with Finland arrived in Greece last month, according to satellite data analysis company QuantCube. It would be the first shipment by the Portovaya project, which began operating earlier this year.

Since 2017, the country has been a top-three source for Europe, accounting for around 20 percent of its total imports in the past three years. Russia was the second-largest source this year, according to Refinitiv, but its share fell to 16 percent despite record imports as Europe took in more U.S. LNG, accounting for 42 percent. Qatar was the third largest LNG supplier to Europe, accounting for 13.7 percent.

“My somewhat cynical view is if we buy LNG from Russia, it’s OK. Because we get some of the Russians who would have been sent otherwise [somewhere else],” said Georg Zachmann, senior fellow at Bruegel. “What Europe urgently needs is a mechanism to protect against the event that Russia selectively sends gas to individual buyers in Europe to buy political benefits” and disrupt Europe’s unity, he added.

European solidarity is already being tested with a rift developing between countries such as Spain and Greece in favor of a cap on gas prices, while Germany, Denmark and the Netherlands remained skeptical of such a move. Meanwhile, Hungary has signed a new gas agreement with Gazprom August.

If the solidarity breaks, “then we run the risk that more countries than just Hungary will be very willing to accept Russian gas easily and that will be a big issue”, Zachmann said.