The European Union’s Ban on Russian LNG Trans-shipments: What You Need to Know

Amidst the ongoing conflict in Ukraine, the European Union has implemented a ban on re-exporting Russian liquefied natural gas (LNG) via EU ports. This move, which aims to reduce Moscow’s revenues, came into effect this week.

Background on the Ban

The ban, which prohibits the reloading of Russian cargoes at EU ports for export to third countries, was initially imposed in June 2024. A moratorium was set until March 26, 2025, for contracts signed before June 25 of the previous year.

While some experts believe that the ban will have minimal impact as trans-shipments to Asia via EU ports account for less than 10% of total Russian LNG exports, suppliers are expected to redirect this volume to Europe.

Key Facts about Russian LNG Exports

Russian LNG Exports:

Russia is the world’s fourth-largest LNG producer, with annual exports totaling 34.7 million metric tons in 2024, a 4% increase from the previous year. Approximately 2.7 million tons were re-loaded at EU ports for exports to Asia in 2024.

While the EU has expressed intentions to reduce its reliance on Russian gas by 2027, the region saw an 18% increase in Russian natural gas imports in 2024, according to a study by the global energy think tank Ember.

Trans-Shipments:

During the winter months when ice prevents traditional LNG vessels from accessing Yamal LNG’s Arctic terminals, Russian LNG exports rely on EU ports for trans-shipments. Special ice-breaking vessels transport cargoes to EU hubs, where they are re-loaded via ship-to-ship transfer (STS) before being exported to countries such as China, Taiwan, India, and Turkey.

Major players involved in Russian LNG trans-shipments include Novatek, Russia’s largest LNG producer, and companies like Shell, TotalEnergies, and CNPC.

Impact on Moscow

While the ban on LNG trans-shipments is expected to have a limited impact due to small volumes, it could increase costs for Russian companies and disrupt logistics. However, Russian LNG can still be trans-shipped within Russian waters at alternative locations.

Overall, the EU’s ban on Russian LNG trans-shipments marks a significant development in the energy landscape, with potential implications for both European markets and Russian suppliers.

Stay tuned for further updates on this evolving situation.

(Source: Reuters)