Russia Challenge to Replace EU Transhipping Services After Ban

Russia will face challenges to find alternatives for transhipping LNG once the EU ban comes into force but the immediate impact on exports may prove negligible, according to Montel sources.

• The transhipment of Russian LNG will be banned next year after a transitional period of nine months, as announced by the EU on Monday.
• “We could see Russia continuing to utilise European transhipment services [in the meantime], while also trying to build up transhipment operations in Russian warm water ports, including Primorsk or Vysotsk,” said David Lewis at S&P Global.
• Russia however could struggle to procure the equipment and expertise within this timeframe, he added.
• The develop a transhipment hub in the Mediterranean, for example Aliaga in Turkey, would be a less likely option. This location would add 15 days to the operation time compared with Zeebrugge in Belgium and could reduce utilisation at Yamal LNG.
• “The transhipment ban will affect shipping routes and fleet optimisation strategies through longer routes,” said Kpler. “Russia will persist in LNG exports, albeit with heightened logistical strain and increased operating costs.”
• Russia’s Murmansk transhipment hub and the summer Northern Sea route are likely to see increased activity due to the ban, Kpler added.