Largest importers of Russian LNG in the EU do not yet plan a blanket import ban

The European Union has reached a preliminary agreement on rules that would allow member states to ban imports of Russian gas. However, two of the three EU countries currently most dependent on imports of Russian liquefied natural gas—Spain and France—are unlikely to ban them. Traders say a ban on Russian LNG imports would push up gas prices in Europe.

Imports of Russian natural gas into the EU have slumped since 2022, after Russia curbed flows to Europe in response to extensive Western sanctions against its economy. By contrast, imports of Russian liquefied natural gas (LNG) into Europe rose sharply, increasing by 40% between January and July 2023 compared with the same period in 2021.

In December, the European Parliament and the Council of the EU, representing member states, approved part of a package setting common rules for natural gas, renewable gases and hydrogen, and preparing the bloc to move away from fossil fuels. The measure would allow member state governments to temporarily prevent Russian and Belarusian exporters from booking the infrastructure capacity needed to transport LNG and natural gas.

Spanish Energy Minister Teresa Ribera said at a press conference on Thursday that there was no legal basis for Spain to impose sanctions on Russian LNG supplies, because the EU’s provisional agreement had not yet become binding.

Ribera said that reducing gas imports from Russia would be desirable and advised companies against signing new supply agreements, but did not suggest that Spain would introduce a ban.

France is meanwhile “assessing whether the conditions for [imposing a ban on Russian LNG imports] could be met, which does not seem to be the case at this stage,” a spokesperson for the French Ministry for Energy Transition told Montel, stressing the need to protect the security of Europe’s supply.

The embargo would affect only the booking of new regasification capacity at terminals, while most of these slots are currently reserved under long-term contracts, the spokesperson added.

Spain increased imports of LNG from Russia

According to preliminary data from ship-tracking company Kpler, European countries, excluding Turkey, imported just over 20 billion m³ (bcm) of LNG from Russia last year, comparable to imports in 2022.

Spain was the largest importer, with deliveries rising by more than a third to 6.7 bcm, while Belgium also increased imports by 41% to 6.6 bcm. Deliveries to France, the third-largest importer, fell by 35% year on year to 4.7 bcm.

European countries could consider “more restrictive” measures against Russian LNG imports now that market fundamentals have improved, storage facilities are relatively full and temperatures are normal to mild, Anne-Sophie Corbeau, a researcher at Columbia University’s Center on Global Energy Policy, told Montel.

“The more favourable the fundamentals, the more the EU is inclined to get rid of Russian LNG,” she said.

Will gas prices rise without Russian LNG?

One Spanish trader told Montel that the EU only wants to make “gestures that signal more drastic” action in the future. If sanctions were imposed on Russian LNG right now, there would be a “drastic increase in prices,” the trader added.

Another trader said that gas prices are currently lower than last year, partly thanks to the high supply of Russian LNG.

National bans on Russian LNG are “possible given the current mood in Europe, but it would be like shooting ourselves in the foot,” said a trader at a large French industrial company, referring to the risk of a sharp rise in gas prices, at least for a while.

The United Kingdom, Latvia, Lithuania and Estonia have already unilaterally banned all imports of Russian LNG.