The European Union is intensifying its efforts to combat the Russian war campaign in Ukraine. After over two years since the invasion began, Brussels has set its sights on Russian liquefied gas (LNG) for the first time, a major source of revenue for Moscow. While the European External Action Service is not proposing a complete ban on imports to the EU, it is suggesting re-exporting the gas to countries outside the EU.
The proposal, which will be discussed by EU Member States, could have significant implications for countries like Spain, which is the largest European importer of Russian LNG. Last year, the EU purchased 18 billion cubic meters from Russia, with around 22% of European LNG imports being re-exported to other countries. The plan aims to prohibit Russian LNG from being transshipped 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 that sanctions on re-exporting could disrupt this revenue stream. The proposed sanctions include measures to prohibit new European investments in the Russian LNG sector, impose tougher sanctions on Russian ships, and restrict access to European ports by ships contributing to Russia’s war efforts in Ukraine.
If implemented, 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 ban is becoming more real. Despite limited power due to EU authority over foreign trade and sanctions decisions