New EU Sanctions Target Russian LNG Imports, but not Company’s Own Imports.

The European Union (EU) has imposed new sanctions on Russian liquefied natural gas (LNG) for the first time, targeting only a fifth of the LNG imports from Russia to Europe. However, the company’s own imports are not to be stopped despite demands from the EU Parliament. The permanent representatives of the EU states discussed the possibility of stopping Russian LNG deliveries to third countries through EU ports.

Russia operates icebreaking tankers to transport LNG from the Siberian Yamal Peninsula to be transported away, often only traveling to European ports where the cargo is taken over by regular tankers for onward transport. The sanctions aim to prevent this model, which accounts for around 8 billion euros in spending by EU states in 2023 and represents about 11% of European gas imports. The rest is imported for consumption in EU countries, with no access to direct exports to third countries.

According to the Institute for Energy Economics and Financial Analysis (IEEFA), Russian LNG accounted for about 8.8 percent of European gas imports in the first quarter, with an additional 12 percent coming through the Turkstream and Ukraine pipelines. Russia was the EU’s third largest gas supplier after Norway and the USA. As part of the sanctions package, companies based in the EU will be banned from investing in Russian LNG projects, which may impact future expansion plans as Russia does not have enough liquefaction plants for tanker shipments and relies heavily on pipelines for exporting gas.