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Headlines

EU won't ban Russian LNG until it secures alternatives, diplomats say

Published by Global Banking and Finance Review

Posted on January 29, 2025

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BRUSSELS (Reuters) - The European Commission did not propose a ban on Russian liquefied natural gas in its latest package of sanctions because member states raised concerns about first securing alternatives including from the United States, EU diplomats said.

"First you have to have a deal because otherwise you will be left without gas from Russia and without the U.S.," one of the diplomats said.

In June last year, the European Union banned transshipments of Russian LNG in a further package of restrictions on Russia imposed over its 2022 full-scale invasion of Ukraine.

Moscow had been using northern European ports to do ship-to-ship transfers of LNG for onward journeys to Asia. Since the ban took effect, more Russian LNG has stayed in Europe, prompting some member states to push for tighter rules and an all-out ban.

However, the Commission did not propose tougher measures after pushback from some member states. EU sources said the cold winter weather, gas stocks drawdown and the timing of the Feb. 23 German election put a further dampener on the idea.

"There was never an original measure, so I don't think it's useful to talk about it in terms of watering down," one European diplomat told Reuters.

"The general idea was floated by the Commission in confessionals in order to test the waters...Apparently one or more member (state) signalled enough opposition for the Commission not to deem it opportune to propose such a measure now."

U.S. President Donald Trump said he wants the EU to buy more U.S. LNG and that he will make more of it available. It is unclear when the EU could secure more U.S. LNG in the short term as exports are already at full capacity.

Trump overturned a moratorium on new LNG projects put in place by his predecessor as president, Joe Biden, but major new capacity will not come onstream until 2030.

The U.S. exported 70% of its LNG to Europe in December.

(Reporting by Julia Payne and Jan Strupczewski; editing by Mark Heinrich)