LNG: EU LNG Measures Reflect Growing Confidence in Lack of Russia Gas Supply

The EU LNG measures against Russia announced in June reflect Europe’s growing confidence in a future without Russian gas, although may in the short term even increase Russian LNG imports to Europe, according to OIES.

• The EU transshipment ban on Russian LNG will not automatically invalidate the LNG supply and transshipment contracts concerned, but will create legal complications for the parties to those contracts. The EU ban is likely followed by declarations of force majeure.
• Around 25% of the 20.9bcm exported from Yamal LNG to EU countries in 2023 was transshipped to destinations outside the EU. Some of these volumes could be kept within the EU and increase imports of Russian LNG.
• The impact of the measure on imports of Russian LNG through terminals not connected to the EU grid will mainly be felt in Sweden and Finland, which proposed this measure themselves.
• The ban on providing goods, technology or services for the completion of Russian LNG projects, such as Arctic LNG 2 and Murmansk LNG, could lead to the project cost increases and delays, especially in combination with US sanctions.