France’s LNG Imports From Russia Hit Record With German Help

France’s imports of liquefied natural gas from Russia have surged to a record, aided by deliveries from a German state-owned energy firm.

Author of the article:

Bloomberg News

Anna Shiryaevskaya, Francois de Beaupuy and Petra Sorge

Published Nov 18, 2024  •  3 minute read

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(Bloomberg) — France’s imports of liquefied natural gas from Russia have surged to a record, aided by deliveries from a German state-owned energy firm.

The nation so far this year has received more LNG from Moscow than in any full year since supplies began in 2018, ship-tracking data compiled by Bloomberg show. Deliveries into the Dunkirk terminal near the Belgian border have soared in particular. 

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The overall increase illustrates how Europe remains an attractive destination for cargoes from Russia’s massive Yamal LNG plant in the Arctic. That’s due to long-term contracts by companies such as TotalEnergies SE, Naturgy Energy Group SA and Germany’s Securing Energy for Europe GmbH. 

Even as the region reduces its reliance on Russian energy, the bloc has leaned heavily on LNG to fill the gap after most pipeline to the nation were cut in the wake of the Kremlin’s 2022 invasion of Ukraine. So far, the European Union has largely excluded gas from its sanctions on Russia.

Read: Europe Can’t Seem to Kick Its Russian Energy Habit: QuickTake

It’s unclear how much Russian LNG landing in France is actually being consumed there. Once the liquefied fuel is regasified and enters the grid, molecules mix and flow freely to other nations in Europe.

“With its methane terminals, France has become an importer of LNG, and part of this LNG is then sent to Eastern European countries where it’s being used,” a spokesperson for the French energy ministry said. Private companies are importing the fuel, they added, noting that “it’s neither the states, nor the European Union that make such decisions.”

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France is among several EU member states calling for stricter tracking of Russian LNG imports to improve transparency and help phase out reliance on Moscow’s supplies of the fuel. 

The surge in Russian LNG occurs even as France’s total imports of the super-chilled fuel decline. It’s part of a broader pattern across Europe amid the high costs of procuring LNG, greater demand from buyers in other regions, and weakened industrial consumption on the continent.

SEFE’s Cargoes

SEFE — a former trading unit of Russia’s Gazprom PJSC that was nationalized by Germany at the height of the energy crisis — is unloading at Dunkirk after reinstating a long-term contract inherited from its predecessor, the company said in September. 

All of SEFE´s LNG imports to Dunkirk are sold into the French and Belgian hubs, company spokesman Jan-Peter Haack said by email. “SEFE has never delivered or attempted to deliver Russian LNG into Germany.”

SEFE has a contract to buy Yamal LNG — meaning it must pay for the Russian supply — as well as a separate contract to deliver fuel to Gail India Ltd. To optimize shipping costs, it is sending the Yamal cargoes to Europe while finding other sources for the buyer in India. This occurs as the Red Sea has been effectively shut due to conflict in the Middle East. 

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“If the LNG is not purchased, Russia could also sell the LNG again on the world market and thus generate income a second time for the same LNG volumes,” a spokesperson for Germany’s economy ministry said. “The contract is therefore being fulfilled in order to keep the advantage for the Russian side as low as possible.”

Spain and Belgium are also among nations where LNG flows from Russia are still going strong. Several central European nations including Austria, Slovakia and the Czech Republic have also received pipeline flows from Russia, though a transit for the supplies expires at the end of the year. 

For now, Gazprom is still sending gas to Europe via Ukraine at normal levels, even after cutting off direct shipments to Austria over a dispute with energy company OMV AG. 

In March, the EU will begin applying a ban on transshipments of Russian LNG cargoes in European ports. The move is widely expected to keep more LNG from Russia in Europe.

—With assistance from Kornelija Dauksaite.

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