European imports of Russian maritime gas hit record high

European imports of Russian maritime gas hit record high

Europe is importing a record amount of Russian gas transported by sea, showing how the region has not completely shaken off its dependence on the country for crucial fuel, even as flows through pipelines slow down. are practically stopped.

Imports of Russian liquefied natural gas, which is usually transported on large tankers, increased by more than 40% between January and October this year, compared to the same period in 2021, underlining the difficulty for Europe to wean off gas from Moscow despite Brussels’ attempts to distance itself from Russian sources.

Russian LNG accounted for 16% of European maritime imports during the period. While the total volume of 17.8 billion cubic meters was a fraction of the 62.1 billion cubic meters of gas pipeline during this period, it nevertheless leaves Europe exposed to the weaponization of energy by Vladimir Putin.

“One day Putin might wake up and say, ‘We’re going to stop sending LNG to Europe,’ forcing the region to buy into an even more expensive spot market,” said Anne-Sophie Corbeau, global researcher at the Center on Global Energy Policy at Columbia University.

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

Column chart of volume (bcm) showing increasing European imports of Russian LNG

There are no sanctions on Russian gas, due to its importance for the energy security of some European countries. The Kremlin took advantage of this by phasing out pipeline throughput after the invasion of Ukraine, driving up prices and fueling a cost of living crisis across the continent.

Gas flows via the Yamal gas pipeline, which crosses Poland, have been interrupted since May, and Russia cut off flows via the Nord Stream 1 line to Germany this summer. The pipeline then ruptured, in what some European countries have called a deliberate act of sabotage.

Russia has also recently threatened to restrict supplies to Western Europe through the only pipeline still connecting the region via Ukraine. Russia’s gas pipeline is down nearly 80% from the same time last year, according to data from think tank Bruegel.

To fill the void, Europe, which last year imported 155 bcm of Russian natural gas, including LNG, turned to the international LNG market. It imported a record 111 billion m3 of LNG globally between January and October, according to Refinitiv data, an increase of almost 70% year-on-year.

Imports from Russia during the period amounted to 17.8 billion m3, up 42% compared to the same period in 2021, France, Belgium, Spain and the Netherlands absorbing almost any volume.

Most Russian LNG comes from the Yamal LNG joint venture, majority-owned by Russian company Novatek, with other stakes held by France’s Total, China’s CNPC and a Chinese state fund. Just under 10% of Novatek’s shares are held by Russian state-owned Gazprom.

In another sign of Europe’s ties to Russia, a large vessel carrying LNG from the Portovaya facility, near Russia’s southern border with Finland, arrived in Greece last month, the company says. QuantCube satellite data analysis. This would mark the first expedition of the Portovaya project, which started operating earlier this year.

As of 2017, the country has been one of the top three sources for Europe, accounting for around 20% of its total imports over the past three years. Russia was the second largest source this year, according to Refinitiv, but its share fell to 16% despite record imports as Europe absorbed more US LNG, which accounted for 42%. Qatar was the third largest LNG supplier in Europe, accounting for 13.7%.

“My somewhat cynical view is that if we buy LNG from Russia, it doesn’t matter. Because we get from the Russians what would otherwise have been sent [somewhere else]said Georg Zachmann, senior researcher at Bruegel. “What Europe urgently needs is a mechanism to protect itself against the case where Russia selectively sends gas to individual buyers in Europe in order to buy political advantages” and to disrupt the unity of Europe, he added.

European solidarity is already being tested with a growing divide between countries like Spain and Greece in favor of capping gas prices, while Germany, Denmark and the Netherlands remained skeptical of such a decision. Hungary, meanwhile, signed a new gas contract with Gazprom in August.

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

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