European Union Mulls First-Ever Sanctions Targeting Russia's LNG Sector

The European Union (EU) is contemplating broadening its sanctions against Russia amidst the ongoing war in Ukraine, with a specific focus on Moscow's liquefied natural gas (LNG) sector.

The objective behind the proposed expansion is to further diminish Russia's revenues derived from fossil fuels, considering concerns that the effectiveness of previous sanctions fell short of EU expectations.

Discussions surrounding the LNG proposal took place among EU ambassadors during a meeting on Wednesday. However, according to an EU diplomat, the talks are still in preliminary stages.

In response to Russia's 2022 invasion of Ukraine, the EU has already implemented 13 rounds of unprecedented sanctions against Russia, with a significant number targeting its vital oil and gas exports.

The latest proposal put forward by the European Commission reportedly includes elements pertaining to ship-to-ship transfers of LNG, as per another EU diplomat.

This entails a prospective ban on European Union ports from re-exporting Russian LNG to third countries beyond the bloc, although imports of the fuel into EU states would remain unaffected, reports Economic Times.

Belgium, France, The Netherlands, and Spain are identified as key points for LNG deliveries from Russia's Siberian Yamal Peninsula, according to Urgewald, a German environmental organisation.

The proposal also aims to forbid any EU involvement in new Russian LNG projects, aiming to curtail the expansion of Russia's LNG capacity and consequently its revenues, elucidated a document dated 3 May.

In 2023, EU countries reportedly paid 8.2 billion euros ($8.8 billion) for Russian LNG, according to an April report by the Centre for Research on Energy and Clean Air.

Additionally, Brussels is contemplating extending sanctions to include more Chinese entities allegedly involved in supplying Russia with military technology, disclosed a diplomat, albeit without providing specifics.

As discussions are still at an early stage, these plans may undergo modifications as the EU's 27 member states work towards reaching a final consensus on the proposed sanctions package.

Following recent revelations about the LNG plans, Hungary has expressed scepticism, underscoring potential complexities in achieving unanimity among EU member states.