EU: five times the cost of LPG from Russia

The European Union has spent a record 12.5 billion euros on Russian LNG this year, five times more than spending a year earlier.

How informs Bloomberg, this year EU significantly reduced dependence on Russian energy, helped by a ban on coal imports and an embargo on oil, but imports of liquefied natural gas from the Russian Federation increased by about 40% over the year. The publication refers to ship and port tracking data and claims that in the 9 months of this year, from January to September, the EU spent a record 12.5 billion euros on Russian LNG.

Russia has managed to become the No. 2 supplier of LNG to northwestern Europe this year, as shown by ship and port tracking data – well behind the US, but ahead of Qatar. This was helped by the growing demand from Belgium, France and some other countries, Bloomberg notes.

Prior to the invasion of Ukraine, pipeline gas from Russia was the largest source of fuel in Europe. After the Kremlin limited supplies, it was forced to increase its imports of LNG – both from Russia and from other states. Only the UK and the Baltic countries have stopped buying Russian LNG. In contrast, Russian oil is not bought in the region, and on December 5, the EU ban on its supplies should come into force.

Given the scarcity of global supplies, a total embargo on gas from Russia was never seriously considered. However, the European Union is making significant efforts to find alternative sources. In March, the EU plans to replace almost 2/3 of gas imports from Russia, with most of the new volumes coming in the form of liquefied gas.

To date, Russian gas accounts for less than 10% of fuel supplies to the region, last year – more than 1/3, but the share of LNG in Russian supplies is approaching 50%.

Deliveries to Belgian ports doubled between January and October this year, while imports to France increased by 60%. Most of the world’s LNG supplies are fixed in long-term contracts, and the sellers are often large multinational corporations that are practically not controlled by the government.

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