Spanish Energy Minister Teresa Rivera told a press conference on Thursday that there was no legal basis to impose sanctions on Russian LNG shipments as the EU’s interim agreement was not yet binding.
She was referring to an interim agreement reached last month by EU member states giving them legal powers to block Russian gas imports.
But Rivera said it would be “desirable” to see fewer imports from Russia and advised companies not to sign new supply deals with Moscow, but gave no indication that a ban was on the horizon. Didn’t mention it.
Meanwhile, France is “assessing whether the conditions for implementation are in place.” [a ban on Russian LNG imports] A spokesperson for France’s Energy Transition Ministry stressed to Montel the need to protect Europe’s supply security, saying, “While this condition may be met, it does not seem likely at this stage.”
The embargo only affects the terminal’s new regasification capacity bookings, but the “vast majority” of these slots are currently booked under long-term contracts, he added.
European countries excluding Turkey imported just over 20 bcm of LNG from Russia last year, down just 1% compared to 2022, according to preliminary data from ship tracking company Kpler.
Spanish imports rapidly increase
Of these, Spain was the largest importer, with deliveries increasing by more than a third to 6.7 billion cm, while Belgium also increased its imports by 41% to 660 million cm. In France, the third-largest importer, shipments fell 35% year-on-year to 47 billion centimeters.
Anne-Sophie Corbeau, a researcher at Columbia University’s Global Energy Policy Center, said improved market fundamentals, relatively good storage facilities, and moderate to moderate temperatures have led European countries to be more receptive to LNG imports from Russia. He told Mr Montel that “more severe” measures could be considered.
“The better the fundamentals, the more likely the EU will be to exclude Russian LNG,” he said.
Price increase?
But one Spanish trader told Montel that the EU simply wanted to take “more drastic” action in the future.
If Russian LNG were sanctioned now, “prices would rise significantly,” he added.
Another agreed, pointing out that gas prices are currently lower than last year, partly because Russia’s LNG supplies were so “abundant.”
According to Ice Endex data, the benchmark TTF gas price last month was around €31/MWh, a significant drop from around €65/MWh at the same time last year.
bearish mood
A trader at a major French industrial company said a state embargo on Russian LNG “is possible given the current atmosphere in Europe, but it would be like shooting yourself in the foot,” adding that at least momentarily, gas prices would decline. He mentioned the risk of a sharp increase.
He said participants are currently trying to “negate the effects of gas by trading spreads when trading in the market, but it has gotten out of control and new measures could come out of the blue.” Because of their sexuality,” he added.
The UK, Latvia, Lithuania and Estonia have already unilaterally banned all LNG imports from Russia, as European countries seek to reduce their dependence on energy imports from Moscow due to the Ukraine war.
Belgium’s Energy Ministry has not yet responded to Montel’s request for comment.
Additional reporting by Rodrigo de Miguel.