S&P Global: EU Could Finalise Russia LNG Sanctions in June

The European Union is gearing up to put the finishing touches on its 14th sanctions package on Russian energy this month, with sanctions targets to include shipments of Russian LNG, the European energy commissioner has told S&P Global Commodity Insights on Monday.  

The sanctions package adds three Russian LNG projects to the blacklist, including Arctic LNG 2, Ust-Luga and Murmansk, Energy Commissioner Kadri Simson told S&P Global Commodity Insights, adding that this sanctions package would be “the first one where we cover also partially LNG trade and specifically transshipments”. 

The EU’s 14th sanctions package is far from a done deal, however, with all EU member states required to be on board with the deal, and some clear outliers waiting in the sidelines to scupper the package. 

Speaking to S&P Global on the sidelines of the Japan-EU energy forum in Tokyo, Simson said EU member states had discussed the package and requested more information and that she expected them to agree to adoption. 

"We have provided them [with an] assessment on how these measures will impact international LNG markets. Our assessment is that it doesn't have a major impact to global LNG markets and LNG markets right now are liquid enough to cover the demand even if we introduce our 14th package,” S&P Global quoted Simson as saying, expressing confidence that the package could be finalized in June. 

In mid-April, the European Union Agency for the Cooperation of Energy Regulators (ACER) cautioned that sanctioning Russian LNG could negatively impact the security of natural gas supply in Europe. 

Currently, the Baltic EU member states are calling for a ban on the bloc’s imports of LNG, but the EU’s watchdog believes that any such move should only be gradual.  

As the EU aims to completely end its reliance on Russian fossil fuels by 2027, “the reduction of Russian LNG imports should be considered in gradual steps starting with spot Russian LNG imports,” ACER said in its report ‘European LNG market developments’.

By Charles Kennedy for Oilprice.com

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