The European Union bought 97% of the liquefied natural gas produced at Novatek’s Yamal LNG facility over the first quarter of the year, raising certain questions about the pending ban on all Russian gas imports from next year.
Despite attempts to secure alternative supply and reduce its purchases of Russian energy altogether, the EU appears to have found it difficult to find that alternative supply at competitive prices, leading to a 17% increase in purchases from Yamal LNG, for a total of 5 million tons, according to data from Kpler cited by the Financial Times.
The EU bought 69 out of the 71 LNG cargoes shipped from the Yamal Peninsula in western Siberia between January and March, with 25 cargoes received in March alone—the highest monthly total for the quarter. The cargoes represented a total of 1.8 million tons of the superchilled fuel.
The publication also wrote that the bill for the Yamal LNG gas for the first quarter had come in at 2.88 billion amid soaring gas prices as a result of the disruption of energy flows out of the Middle East.
EU countries are now facing the first phase of the Russian gas ban, set to take effect on April 25, when EU buyers will be banned from buying Russian LNG under spot contracts. A full ban will take effect for LNG imports from the beginning of 2027 and for pipeline gas imports from the autumn of 2027.
The time of the ban is rather inconvenient in light of first-quarter purchases. European countries have depleted their gas storage and now need to start refilling them while demand for gas is seasonally low. But with spot deals for Russian LNG set for a ban, the availability of gas will be squeezed additionally, on top of the now-absent Qatari supply.
By Irina Slav for Oilprice.com
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