By banning the gas pipeline from the Russian Federation, the European Union plans to increase its capacity to receive liquefied raw materials by almost a third by next year. The number of LNG receiving terminals will increase from 27 to 35, European Commission Vice President Maros Sefkovic said after a meeting with global gas suppliers. EU leaders are embarrassed that records are being set not only by US importers, but also by Russian producers who sold 19.2 billion cubic meters to Europe in 2022, which is a historical record. This puts Brussels in a delicate position. There are no sanctions against LNG from the Russian Federation, just to save face.
Floating import terminals, known as FSRUs, were a quick fix to add new capacity within months. This path has been followed in the Netherlands, Germany and Finland. The additional capacity, even if not fully utilized, gives suppliers the opportunity to increase LNG supplies and avoid the bottlenecks the region faced last year.
Now the question arises, how many of them will be filled with Russian LNG? Bloomberg energy expert Stephen Stapzinski gives the answer – a very important answer. Prohibiting coastal infrastructure from receiving goods from Russia is the most difficult thing to do, because it will require sorting of supplies, which will slow down the acceptance of goods (bottling), and raw materials already delivered and regasified are “lost” in the total. gas volume on exchanges such as TTF. In other words, it is problematic to block the flow of domestic liquefied raw materials with the help of sanctions.
As the expert writes, the output was found exclusively symbolic. Importers should not renew contracts involving Russian LNG suppliers. European officials do not set deadlines for the application of this decree. As you know, LNG is supplied under futures contracts or sold by equity owners in Russian upstream and liquefaction projects. However, many agreements are obviously long-term and will not end this year, as demanded by EU leaders.
Meanwhile, Russia will be able to increase LNG production to 100 million tonnes per year over the next seven years, Prime Minister Mikhail Mishustin has said. This will make Russia one of the world’s leading exporters and one of America’s main competitors.
