FT: EU to give member states powers to block Russian gas imports

The EU is going to give member states the power to stop gas imports from Russia and Belarus almost two years after Moscow's full-scale invasion of Ukraine, the Financial Times reports, UNN writes.

Details

"Any member state would be able to ban companies from Russia and Belarus from buying capacity in its gas pipelines and liquefied natural gas terminals," the newspaper writes, citing a draft document proposed by Brussels.

According to a senior bloc official, the proposal could provide EU energy companies with a basis to withdraw from contracts with Russian gas suppliers without having to pay huge compensation.

Although the 27-member bloc has gradually reduced its dependence on Russian energy since the February 2022 invasion, it still receives about a tenth of its gas supplies, including LNG, from the country, the newspaper notes. Some member states, including Austria and Hungary, remain heavily dependent on supplies from Russia, the newspaper writes.

"The European Commission wants to push member states to stop importing the remaining gas. Some member states, including Poland and the Baltic states, are openly demanding tougher measures against Moscow," the article says.

Under the draft, EU member states would reportedly be allowed to "partially or, where justified, completely restrict" access to infrastructure for gas operators from Russia and Belarus "where necessary to protect their essential security interests."

"Negotiators from EU member states and the European Parliament are expected to approve the draft text on Friday. The final version has yet to be formally approved by the (Euro)Parliament and member states," the newspaper writes.

Instead of a complete ban on Russian gas imports, which could destabilize markets and was resisted by countries with few alternatives, the European Commission, as noted, tried to convince capitals to diversify their fuel sources, setting the EU a goal of becoming free of Russian fossil fuels by 2027.

According to Eurostat, in the third quarter of 2023, Russia provided about 12 percent of total gas imports to the EU.

The rise in Russian LNG imports last year was particularly worrisome, not least because it is Moscow's most important source of funding for its military actions against Ukraine, the newspaper writes.

In August, the FT reported that the EU is importing record volumes of supercooled fuel from Russia, despite the 2027 target.

European Energy Commissioner Kadri Simson has repeatedly called on EU governments to take a tougher stance, saying at a conference in Warsaw in September that the bloc "must reduce Russian LNG exports to completely abandon them."

Belgium and Spain, which have large regasification terminals for the liquid fuel, reportedly became the largest importers of Russian LNG this year after China.

The Netherlands has banned new Russian LNG transshipment contracts that involve transshipment of gas between Russian Arctic icebreakers and tankers that deliver the fuel to temperate countries, especially Asia.

But Belgium, Spain, and France have allowed the import and re-export of Russian LNG to continue, arguing that it is difficult for their companies to abandon existing contracts.

Other countries, including Germany, also use LNG imported through other Western European countries.

The EU has proposed that the bloc extend measures taken during last year's gas crisis to stabilize prices by cutting gas demand by 15 percent and extending price caps for another year.

The extension is to be agreed by EU energy ministers on December 19, but could be overridden by Friday's deal if member states take action to cut off supplies from Russia, the FT points out.

To recap

On December 23, 2022, the EU approved a gas price ceiling of 180 euros/MWh.