Before new energy sanctions on Russia come into effect, the European Union (EU) imported a record amount of liquefied natural gas (LNG) from Russia’s major Yamal LNG project during the first six months of this year.
Despite the prolonged war in Ukraine and the possibility of stricter sanctions, European countries have continued purchasing gas from the Russian LNG facility.
According to a report published by the Financial Times on Monday (July 13), data from analytics firm Kpler showed that the EU imported 9.89 million tonnes of LNG from the Yamal LNG project between January and June, an increase of around 18 percent compared with the same period last year.
The report noted that although Russia’s military operation in Ukraine has entered its fifth year, European imports have continued to support one of Russia’s key energy projects.
According to calculations by environmental non-governmental organization Urgewald, Europe spent around 6 billion euros on Russian LNG during this period.
Among EU countries, France imported the largest volume of LNG, totaling around 3.6 million tonnes. It was followed by Belgium, which imported approximately 2.9 million tonnes, while Spain purchased around 2.7 million tonnes.
Sebastian Rotters, a sanctions campaigner at Urgewald, said it was concerning that Europe continues importing Russian gas while Moscow carries out attacks on Ukraine’s energy infrastructure and civilian areas.
He said such purchases are effectively providing support to Russia’s energy sector.
Under current regulations, the purchase of Russian LNG under short-term contracts is prohibited. Therefore, customs authorities in each country must verify that individual shipments are imported under long-term agreements.
However, under an EU decision, imports of Russian LNG under long-term contracts will also be banned from January 1, 2027. The bloc also plans to completely halt Russian pipeline gas imports by the end of the same year.
Analysts say the European market remains crucial for keeping the Yamal LNG project operational. The project relies on a limited fleet of specialized Arc 7 ice-class tankers, which can reach European ports more easily but require more time and higher costs to deliver LNG to Asian markets.
As a result, while supplies to Europe increased during the first half of this year, exports to Asia fell by around 74 percent to approximately 510,000 tonnes.
Despite traditionally higher Asian demand during the summer season, exports did not increase this year due to uncertainty over sanctions and the cautious approach of international shipping, insurance and financial institutions.
The report further stated that maintenance of Yamal’s ice-class LNG tankers still depends on facilities including Damen Shipyard in Brest, France, and Fayard A/S in Denmark.
Rotters said the Yamal project continues to operate with reliance on European ports, ship services and specialized maritime fleets.
Launched by Russian President Vladimir Putin in 2017, Yamal LNG is currently Russia’s largest LNG production facility. The project has an annual production capacity of 17.4 million tonnes and is primarily owned by Russian energy company Novatek, with participation from France’s TotalEnergies and China’s CNPC.
Meanwhile, TotalEnergies CEO Patrick Pouyanné had earlier warned that exports from the Yamal project could be halted if necessary due to sanctions-related uncertainties.
Attention is now focused on 2027, when the full sanctions regime is expected to come into effect and the future of the Yamal LNG project will face a new phase of uncertainty.
Source: Financial Times