Page 202 - RusRPTAug24

countries - even by 6.3%, to 9.7mn tonnes, writes Kommersant.
Sanctions against Russian LNG (a ban on transshipment in EU ports for the purpose of export to third countries, but not on import) are included in the 14th European package. This is the first such restriction since the start of the war in Ukraine, but it will take effect after a nine-month transition period.
The EU cannot ban direct supplies - Belgium, Spain and France depend on Russian liquefied gas, which became its largest buyer in the past six months (+86.8%, 3.2mn tonnes). After the abandonment of Russian pipeline gas and the explosion of Nord Stream, European buyers were forced to reorient themselves to Russian LNG - its exports to Europe increased by 40% in the first year and a half of the war.
Russian LNG is now being helped by geopolitics and geography. Vulnerable gas carriers do not sail through the Red Sea due to the threat of Houthi attacks, so Yamal gas from Novatek projects is competitive both in terms of delivery time to the EU and in price. Especially in France, where LNG shipments reach from Yamal in 9–10 days.
Exports to Asian destinations, on the contrary, are falling. LNG exports from Russia to China fell by 11.4% over six months, to 2.5mn tonnes, to Japan - by 8.6%, to 2.8mn tonnes. Prices there are now about the same as in Europe, and logistics are noticeably more expensive.
The EU sanctions that are coming into force are mild and essentially change little: gas previously shipped to Asia with transhipment will simply go to the union’s internal market, independent expert Alexander Sobko told Kommersant. The ban on transshipment in Europe for shipment to third countries will affect approximately 4–6mn tonnes of Russian gas.
What's in it for me? The growth of imports of Russian LNG by the European Union against the backdrop of increasingly harsh sanctions makes a good propaganda story about the hypocrisy of the West. But only at first glance.
Firstly, the current situation is temporary. The LNG market shortage should end with the commissioning of LNG capacity in the Middle East in 2025–2026, and the take or pay contracts of TotalEnergies (which retains a stake in Yamal LNG) expire in the foreseeable future. Secondly, other long-term mechanisms are working to stifle Russian LNG projects, and primarily Novatek - blocking sanctions against gas carriers and terminals, the threat of secondary sanctions against shipyards building gas carriers and a ban on investments and services related to unfinished LNG projects in Russia. It is not for nothing that Russia is creating a shadow fleet of gas carriers similar to the tanker fleet.
202 RUSSIA Country Report August 2024 www.intellinews.com