Despite the demise of Nord Stream, EU imports of liquefied natural gas from Russia have surged by 46 percent this year.
Since Vladimir Putin's invasion of Ukraine, European leaders have bragged about reducing their dependence on Russian gas. However, this is only partially true.
During the first nine months of 2022, imports of liquefied natural gas (LNG) from Russia into the European Union climbed by 46 percent year-over-year, according to data from the European Commission. This is in contrast to the substantial decline in pipeline-delivered natural gas supply this year.
As the EU looks to replenish its winter gas reserves in 2023, the increased use of seaborne LNG from Russia poses a risk that the bloc will be subject to a new round of Putin's gas blackmail.
EU authorities have taken delight in the fact that countries have curtailed their purchases of Russian fossil fuels since the beginning of the war, in an effort to weaken the Kremlin's coffers. President of the European Commission Ursula von der Leyen stated in September, "We must restrict Russia's earnings, which Putin uses to support his heinous war in Ukraine."
And while the supply cuts on pipeline gas have been severe — a result of Russia limiting pipeline flows and EU countries diversifying imports — Europe's smaller LNG trade with Russia tells a different tale.
According to data provided by the Commission, EU countries purchased 16.5 billion cubic metres (bcm) of Russian LNG between January and September 2022, up from 11.3 bcm during the same time in 2021.
The increase in LNG imports pales in comparison to the massive decline in Russian pipeline gas imports, which fell from 105.7 bcm in the first nine months of 2017 to 54.2 bcm in the same period of 2018. The increase in LNG imports, however, runs counter to EU rhetoric and carries its own inherent risks, according to energy market specialists.
France, the Netherlands, Spain, and Belgium were the leading importers of Russian LNG in 2022, according to an analysis by the energy market monitoring firm Montel, with a third of Russian LNG shipments to Europe destined for France and roughly a quarter destined for Spain.
The majority of Russian LNG arriving in Europe is supplied by Novatek, which controls the Yamal LNG facility in northwestern Siberia and has a minority stake in the French energy giant TotalEnergies. Several European nations have long-term import contracts for LNG with several years remaining.
Unlike the majority Russian state-owned Gazprom, which has a monopoly on pipeline exports, Novatek is an independent company, according to an analysis published by Columbia University's Center for Global Energy Policy. However, Novatek has "shareholders who are close to the Kremlin, which can strongly influence its operations."
Only the United Kingdom and Lithuania in Europe have ceased all imports of Russian LNG.
Anne-Sophie Corbeau, a scholar of global study at Columbia University, stated that it was "extremely convenient for everyone to turn a blind eye to Russian LNG flows into Europe."
In economic terms, Corbeau said, it “made sense” for Europe to keep importing LNG from Russia for now. Cutting Russian LNG out of the EU market would mean European countries buying up more LNG from elsewhere in the world, driving up prices for poorer countries in Asia.
“The prices would be stratospheric and that would be extremely bad not only for Europe but also for a lot of countries that wouldn’t be able to afford [LNG],” Corbeau said.
She warned, however, that growing imports of Russian LNG increased the likelihood that "Russia will utilise LNG as a geopolitical weapon," as it has with pipeline gas. Putin could conceivably ban deliveries to "hostile" nations while continuing to give a gas lifeline to energy-starved Asian developing nations.
Such a move could have repercussions for the EU in 2023, as the International Energy Agency has issued fresh warnings that Europe could face a gas supply imbalance of up to 30 bcm during the summer storage-filling season of 2023.
Svitlana Romanko, the director of the Ukrainian advocacy group Razom We Stand, which is advocating for a complete EU ban on Russian fossil fuels, stated that there was a compelling moral argument for halting Russian LNG shipments.
“While the EU talks tough on sanctions and embargoes, the reality is that very little is being done to reduce imports of LNG,” Romanko said. “Europe needs to take action now and stop this absurd and counterproductive funding of the Russian war machine.”
By fLEXI tEAM