EU’s rejection of Russian gas easier said than done as LNG purchases increase

By Rhod Mackenzie

Europe’s commitment to weaning itself off Russian fossil fuels appears to be in name only. Imports of Russian LNG into the European Union have now reached record levels. Spain and Belgium have doubled their purchases.

According to the Centre for German Studies at the Russian Institute of Europe, LNG supplies from Russia to Europe reached an all-time high of 16.7 billion cubic metres last year. By comparison, the volume in 2021 was  only12.3 billion cubic metres. The trend is continuing this year.

From January to September 2023, Spain and Belgium became the largest buyers of Russian LNG in the European Union. According to the Institute for Energy Economics and Financial Analysis (IEEFA), deliveries were 50% higher than in the same period last year. Spain bought 5.21 billion cubic metres of gas from the Russian Federation, and Belgium 3.14 billion cubic metres. France is also one of the largest importers.

The share of LNG imports from Russia in Spain’s total volume is 26.5%, in Belgium it is even higher – 37.2%. The value amount of Russian gas purchases in Spain reached €1.65 billion, in Belgium €1.3 billion.Total  EU imports of Russian gas totalled €5.51 billion.

According to the Spanish energy company Enagas, Russia is the third largest supplier of liquefied natural gas (LNG) to Spain this year, after Algeria and the United States. According to its data, from January to September 2023, the Kingdom purchased the equivalent of 56,490 GWh of LNG from the Russian Federation, compared to 38,125 GWh for the same period in 2022, or 48.2% more.

– The increase in supplies from Russia to Spain and Belgium is explained by the fact that not all European countries have access to the sea and the capacity to regasify LNG (convert it from a liquid to a gaseous state). Spain has traditionally had large amounts of such capacity. But from these two countries the regasified product is then supplied to a much larger number of countries that continue to consume Russian gas,” commented  Evgeny Smirnov, Deputy Director,at the Department of World Economy  at the Russian University of Management.

According to the French company Kpler (which specialises in gathering information on commodity markets), Russian LNG accounts for 16% of the EU’s total liquefied gas imports. Plus Russia is the second largest supplier of this type of fuel to the European Union. The US is first.

Analysts point to the logistical advantages of importing LNG from the Russia.This is because its geographical proximity determines the shortest (and therefore most economically and environmentally efficient) logistical distance compared to other global LNG suppliers, notes Mikhail Akim, a professor at t Russian Higher School of Economics.

Moreover, the alternative gas suppliers on which the European Union had pinned its hopes have not quite lived up to their expectations.
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