The business is lucrative for Russia. High in the north of Siberia, ice-breaking tankers are filled with liquefied gas and sent on a 13-day journey: first through the Arctic Ocean, then past Norway and Great Britain, and finally to Belgium.
In the port of Zeebrugge, workers pump the gas onto normal tankers. These then transport the valuable goods on to China and India.
Russian liquefied gas is still being traded on a large scale in the EU. The industry calls it “liquefied natural gas”, or LNG for short. Since the beginning of the war in Ukraine, these three letters have played a major role in world politics.
Russia is no longer allowed to import many products to Europe – coal, oil and steel, for example. Cement, wood and cigarettes. Gold, caviar and vodka. But trade in LNG is booming. European companies are making money from it – and so is the Kremlin.
That is now set to change. On Thursday, the EU states agreed on new sanctions against Russia. And for the first time, they are aimed at liquefied natural gas. European ports are no longer allowed to transship the raw material.
Russia’s icebreaking tankers will therefore have to travel longer distances in the future. The ships are slower and more expensive than normal freighters, so the whole operation may soon no longer be worthwhile.
Brussels is pursuing a simple goal: Russia should be able to sell fewer raw materials to the world and thus have less money available for the war against Ukraine. So far, a fifth of all Russian LNG exports are routed through Europe.
This could end with the EU’s 14th sanctions package. The Kremlin would lose further revenue, said Ursula von der Leyen, President of the EU Commission.
European companies will also feel the consequences. For example, Fluxys, the operator of the LNG terminal in Zeebrugge. Until now, the managers have asserted that they cannot turn away the Russian liquefied gas, as there is a 20-year contract.
This argument is likely invalid. According to WELT information, Fluxys’ contracts contain a clause stating that political decisions are considered force majeure and justify termination.
With the new sanctions, Russian gas can no longer be transshipped – but imports remain permitted. The raw material hardly flows into the EU through pipelines anymore.
But deliveries by tanker will probably continue to arrive in the future. Last year, Russia earned more than eight billion euros from exports to Europe, according to estimates.
The EU is the world’s largest buyer of LNG, ahead of China and Japan. The continent sources the raw material mainly from America and Qatar – and of course Russia. Almost 16 billion cubic meters are bought by Belgium, France and Spain, which in turn send part of it by pipeline to Germany and Italy.
This is shown by data from the Finnish think tank CREA. Russia is therefore likely to continue to earn money by selling gas to Europe, despite the new sanctions.
It was a tough road to the adoption of the 14th package. The EU states were able to agree on the LNG sanctions quite quickly, as insiders say.
But another point apparently caused controversy: the so-called “No Russia Clause”. It is intended to ensure that European companies do not export sanctioned goods to countries that then sell them on to Russia.
It is said that the German government resisted these plans out of concern that they would cause effort and costs for the German economy. This is why the negotiations dragged on for weeks.
The compromise now found stipulates that the “No Russia Clause” does not initially have to be applied to subsidiaries.
