Data from Bloomberg shows that the amount of liquefied natural gas (LNG) from Russia to the European Union (EU) in 2024 will reach an unprecedented high, a total of 15.5 million tons, a sharp increase compared to 10.5 million tons in 2020.
The development comes before Ukraine officially terminates a five-year gas transit contract with Russian energy giant Gazprom at the end of 2024.
The cancellation of the transit contract has led to a stop of the flow of gas from Russia through Ukraine to EU countries such as Romania, Poland, Hungary, Slovakia, Austria, Italy and EU candidate Moldova.
Despite efforts to cut energy imports from Russia since the conflict in Ukraine and the sabotage of the Nord Stream pipeline in September 2022, the EU is still heavily dependent on Russian gas. According to Kpler, Russian LNG accounts for 15% of the EU's total imports as of June 2024.
Tatiana Orlova, an economist at Oxford Economics, said: Europe still needs gas, as efforts to separate from Russian energy have not achieved the expected results. The EU may have to increase imports of Russian LNG to compensate for the decline in pipeline gas imports.
In addition to the transit route through Ukraine, Russia still exports gas via the TurkStream pipeline running from Russia to Turkey, supplying gas to the Turkish domestic market and Central European customers such as Hungary and Serbia. However, other routes such as the Yamal - Europe gas pipeline have been suspended since 2022 as Poland has canceled its agreement with Russia.
In that context, LNG has become an alternative choice. However, the EU has also imposed a number of new sanctions to limit the re-export of Russian LNG. From June 2024, Russian LNG tankers will be banned from transferring or re-exporting to third countries, with a transition period of 9 months.
Although the EU has declared its determination to wean itself off Russian energy, data shows that this is not easy. Russia still plays an important role in energy supply to Europe, especially when alternative energy sources cannot fully meet demand.
The EU's record imports of Russian LNG are proof that, regardless of sanctions or political efforts, the energy problem is still a major challenge that the EU cannot completely solve.
