EU agrees to end Russian gas imports by late 2027; Hungary, Slovakia oppose

By Philip Blenkinsop and America Hernandez

BRUSSELS, Dec 3 (Reuters) - The European Union agreed on Wednesday to phase out Russian gas imports by late 2027 as part of an effort to end the bloc's decades-long dependency on Russian energy, though legal challenges from its members already loom.

Representatives for EU governments and the European Parliament reached an agreement in the early hours of Wednesday on proposals set out by the European Commission in June to end shipments from the EU's former top gas supplier following Russia's invasion of Ukraine in 2022.

Under the agreement, the European Union will permanently halt the import of Russian gas and move towards a phase-out of Russian oil. Liquefied natural gas imports will be phased out by the end of 2026 and pipeline gas by the end of September 2027.

"Today, we are stopping these imports permanently. By depleting Putin's war chest, we stand in solidarity with Ukraine and set our sights on new energy partnerships and opportunities for the sector," Commission President Ursula von der Leyen said in a statement.

HUNGARY, SLOVAKIA WEIGH LEGAL CHALLENGES

Hungary, which opposes the move, will challenge the legislation at the EU's Court of Justice on the grounds the measure was wrongfully disguised as a trade policy to circumvent the unanimous voting required for sanctions, its foreign minister said on Wednesday. 

"Accepting and implementing this Brussels order is impossible for Hungary," Foreign Minister Peter Szijjarto said on a broadcast briefing.

Slovakia is also weighing its legal options against the EU order, as the countries are both still highly reliant on gas and oil supplies from Moscow and fearful that more costly alternatives will damage their economies.

The Kremlin condemned Wednesday's EU decision, saying it would doom Europe to becoming less competitive and lead to higher prices for consumers.

As of October, Russia accounted for 12% of EU gas imports, down from 45% before its 2022 invasion of Ukraine, with Hungary, France and Belgium among the countries still receiving supplies.

GRADUAL PHASEOUT BEGINNING IN APRIL 2026

For short-term contracts concluded before June 17 this year, the prohibition will apply from April 25, 2026 for LNG and from June 17, 2026 for pipeline gas. 

For long-term contracts concluded before June 17, the cut-off dates will be the start of 2027 and the start of October 2026, with a possible one-month extension for EU members facing difficulties reaching required storage levels.

Both categories of gas imports will be subject to prior authorisation, except for from countries that have major gas production and that prohibit or restrict imports of Russian gas.

The Commission is also committed to phasing out remaining oil imports from Russia by the end of 2027, with a legislative proposal to be presented early next year. 

Under Wednesday's agreement, EU members will submit 'national diversification' plans regarding oil and gas supplies to the Commission by March 1, and will be required to notify the EU executive whether they have Russian gas supply contracts or national bans in place. 

The Commission will issue recommendations based on this feedback.  

(Reporting by Philip Blenkinsop and Sudip Kar-Gupta in Brussels, Angela Christy in Bengaluru; Editing by Muralikumar Anantharaman and Jan Harvey)