Brussels is intensifying its efforts to curb the Russian war campaign in Ukraine by targeting Russian liquefied gas (LNG) for the first time. The European Union has purchased 18 billion cubic meters from Russia last year, with around 22% of European LNG imports ending up being re-exported to other countries. However, the proposed ban on re-exporting could greatly impact countries like Spain, which is the largest European importer of Russian LNG.
The European External Action Service has suggested a proposal that aims to prohibit the transshipment of Russian LNG through EU facilities to third countries, including ship-to-ship and ship-to-shore transfers. The EU recognizes that Russia profits significantly from the sale and transportation of LNG, and these sanctions aim to disrupt this revenue stream. Additionally, the plan includes measures to prohibit new European investments in the Russian LNG sector, impose tougher sanctions on Russian ships, and restrict the use of European ports by ships contributing to Russia’s war efforts in Ukraine.
The implementation of these sanctions could greatly impact companies like Naturgy, which has a significant contract for the supply of Russian LNG. However, with increasing pressure to escalate sanctions on Russian LNG imports, the possibility of a complete ban is becoming more real. While some countries have limited power to impose bans due to EU authority over foreign trade and sanctions decisions, it remains to be seen how effective these measures will be in stopping Russia’s aggression towards Ukraine.
