Europe's biggest importers of Russian LNG introduce rules to ban its re-export from the EU

Spain, France and Belgium have begun introducing new rules to block the re-export of Russian LNG. The EU will introduce a ban on transshipping Russian LNG from next year. Experts say this is unlikely to affect short-term LNG prices or supplies.

As part of its latest package of sanctions against Russia, adopted in June, the EU will ban the transshipment of Russian liquefied natural gas (LNG) through EU territory for onward shipment to other regions from next year.

“This could complicate logistics and cause headaches for some companies importing Russian LNG,” said Jacopo Casadei, an analyst at Energy Aspects, but noted that the regulation is unlikely to cause supplies to be diverted away from the EU.

The sanctions will not significantly disrupt market prices if Russia maintains its export volumes, said the head of global energy market analysis at a European energy company, according to Montel.

“At least we have found a way to work with these rules, and the market seems to be doing the same, so trading is continuing more or less as before,” the head of regulatory affairs at a European commodities trading firm told Montel.

Spain was the EU’s largest importer of Russian LNG last year, with 6.7 billion m³ (bcm), followed by Belgium with 6.6 bcm and France with 4.7 bcm. These countries are now introducing rules to prevent Russian LNG from being transshipped and transported outside the EU.

Spanish transmission system operator Enagas adopted new rules last month requiring traders re-exporting LNG to countries outside the EU to have unloaded an equivalent non-Russian cargo in the previous 15 days and to have contracted storage capacity for the same period.

Spanish Energy Minister Teresa Ribera has always opposed imports of Russian gas and supported a unified EU response, a ministry spokesperson said.

Measures introduced in France include mandatory reporting to track Russian LNG deliveries. The French Ministry of the Economy recently sent LNG market participants a notice explaining how to apply the sanctions, a spokesperson for LNG terminal operator Elengy said.

The company operates three of the country’s five LNG terminals, including the Montoir de Bretagne facility in the northwest, which receives Russian LNG for transshipment and has an annual capacity of 10 bcm.

Belgian authorities were also preparing to introduce the new sanctions, although the measures are still under discussion among the authorities, customs officials, ports and Fluxys, which operates the terminal in Zeebrugge.

Major importers have not yet banned Russian LNG imports

In May, the EU approved legislation on the gas and hydrogen markets that allows national governments to ban imports of Russian LNG. However, none of the major importers—Spain, France and Belgium—has introduced such a ban so far.

Before Russia’s 2022 invasion of Ukraine, the EU imported 40% of the gas it consumed from Russia. As a result of diversifying gas supplies from other sources, lower overall demand and the continued growth of renewable energy, this share has fallen to less than 10%. The EU aims to phase out all imports of Russian fossil fuels by 2027.