LNG

The EU’s latest sanctions package against Russia avoids a full LNG ban—restricting measures to terminals off its main gas grid—while Russian LNG exports grew until a January 2025 drop (y-o-y). The package correlated with intensified Novatek lobbying efforts in Brussels.

The European Union’s latest sanctions package against Russia is set to refrain from imposing a comprehensive ban on Russian LNG imports, despite mounting pressure from within the bloc, according to reporting by POLITICO.

Instead, the proposal focusses on restricting Russian LNG shipments only to those EU terminals that are not connected to the main gas grid.

This limited approach means that most LNG imports, which predominantly arrive at ports in Spain, Belgium and France, are likely to remain unaffected.

The nuance in relation to main gas grid connectivity tallies with European gas market integration and highlights the Commission’s view on the ongoing significance of Russian LNG volumes in Europe’s gas mix.

LNG Trade Flows

Russian LNG exports to the European Union have been growing on an annual basis since before Russia’s invasion of Ukraine.

For example, these shipments were up by 1.83mmt (11pct) to 17.76mmt in 2024 from 15.93mmt in 2023, according to our data.

However, Russia-EU LNG flows did not manage to continue year-on-year growth in January 2025, having decreased by 0.50mmt (-25pct) to 1.54mmt. This also meant they were down by 0.10mmt from the 1.64mmt in 2023, according to our data.

Additional Sectoral Targets

In addition to the nuanced LNG measures, the package includes sanctions aimed at other sectors.

The EU plans to target 74 ageing oil-exporting tankers that form part of Russia’s so-called “shadow fleet” and will also introduce penalties on Moscow’s aluminium exports—a commodity that still constitutes about 6pct of the bloc’s imports.

Unusually, new restrictions will extend to certain video game equipment, such as Microsoft’s Xbox, which the EU claims Russia is utilising to pilot drones.

Novatek Lobbying

Amid these developments, reporting by the Financial Times highlighted Russian energy giant Novatek has intensified its lobbying efforts in Brussels.

The company has approached several influential think-tanks, including the European Policy Centre, Bruegel, and the Centre on Regulation in Europe, in a bid to engage in discussions about energy security and the evolving EU policy landscape.

These overtures, however, have reportedly been met with resistance by the think-tanks, reflecting growing scepticism towards attempts to dilute or reverse the sanctions.

The EU's targeted approach to sanctions reveals complex dynamics at play.

While maintaining access to Russian LNG through major terminals—a pragmatic choice given Europe's ongoing energy security concerns—the bloc is strategically expanding restrictions across multiple sectors.

This diversified strategy aims to gradually increase pressure on Moscow's revenue streams while minimizing immediate economic disruption to EU Member States.

Novatek's intensified lobbying through established think-tanks suggests growing concern within Russia's energy sector about long-term market access, even as current LNG flows remain relatively stable.

However, the effectiveness of the EU's sanctions strategy will largely depend on member states' unified implementation and their success in developing alternative energy partnerships.

South Korea is to change its energy import strategy by importing up to 7 mill tonnes of US LNG per annum. 

This move aims to gradually replace its Qatari LNG imports, driven by the expiration of long-term contracts and the desire to diversify energy sources. 

Click to Download

Europe may have to buy at least 100 more LNG cargoes this summer to replenish its gas stocks.

These cargoes would be needed after a drop in storage levels this winter, due to cold weather and the cessation of Russian supplies.

After failing to sell regas LNG, Pakistan’s state-owned Sui Northern Gas Co (SNGPL) has asked the government to divert 11 LNG cargoes to be imported in the next 11 months of 2025 from Italian giant, Eni, to the international market.

This was down to SNGPL’s Power Division refusing to increase the use of LNG for power generation even during June, July and August - the peak summer months.

Egypt and a consortium, involving TotalEnergies and Eni, are to sign an agreement next month to transport natural gas from an undersea deposit in Cypriot waters to Egypt, where it will be liquefied and processed for export.

Cypriot Energy Minister, George Papanastasiou, described the agreement as “most significant” last week, as it allows the consortium to work out the technical details on how to get the gas from the Cronos gas deposit to Egyptian processing plants for liquefaction and eventual export.

Japanese energy trader, JERA Global Markets and the UAE’s ADNOC Gas and its subsidiaries have signed a $450 mill (AED1.653 bill) LNG supply agreement. 

Under the terms of the deal, LNG will be supplied from ADNOC Gas to JERA Global Markets’ global supply portfolio for three years.

Australian exploration and production company, Tamboran Resources has signed a non-binding memorandum of understanding (MoU) with Santos LNG to progress Darwin LNG’s (DLNG) expansion plan studies.

This agreement relates to technical studies on a potential DLNG Train 2 expansion project and collaborative work on the jointly owned EP 161 acreage (Santos 75%, Tamboran 25%) in the Beetaloo Basin. 

Venture Global’s Class A common stock shares started trading on the New York Stock Exchange (NYSE) last Friday under the symbol ‘VG’.

The company’s IPO involving 70 mill shares of its Class A common stock, par value $0.01, was priced at $25 per share.

Golar LNG has signed a share purchase agreement for the sale of all its shares in Avenir LNG to Stolt-Nielsen Gas for around $40 mill. 

The Transaction is expected to be completed during the first quarter of this year, subject to the fulfillment of the conditions under the share purchase agreement.