The European Union’s proposed ban on the transhipment of Russian liquefied natural gas (LNG) is unlikely to impact Asian buyers, according to Kadri Simson, the European Commissioner for Energy.
As part of the 14th package of sanctions against Russia over its war on Ukraine, the EU has proposed to ban the re-loading services by EU facilities for the transhipment of Russian LNG to third countries. However, this does not affect the direct imports of Russian LNG into the EU.
The proposed sanctions would also ban new investments and the provision of goods, technology, and services by EU operators for the completion of LNG projects under construction, such as Arctic LNG and Murmansk LNG.
Addressing reporters in Tokyo, Simson stated that the LNG market is now a liquid market, and it is possible to replace volumes even if Russia is unable to find alternative transport means. She emphasized that the proposed ban will not impose problems for Asian consumers.
“This will not impose problems for Asian consumers: LNG market now is a liquid market and it is possible to replace volumes even if Russia will not find alternative transport means,” Simson said.
The commissioner further explained that the proposed ban would mean that Russia has to use more expensive alternative vessels to serve its third-country customers, but it would not withdraw volumes from the global markets.
Simson also noted that the European Commission has provided its member states with all the necessary data to ensure that the proposal will not significantly impact global markets.
Diplomats have indicated that some EU member states, including Belgium, Germany, and France, have asked the commission for assessments on whether the ban may hit the Russian economy more than the EU’s.
The EU is racing to finalize the 14th package of sanctions before Hungary takes over the EU presidency in July. Hungarian Prime Minister Viktor Orban, who maintains ties with Russian President Vladimir Putin, has previously tried to block aid to Ukraine and restrictions on Moscow.
Simson expressed confidence that Hungary would be “thinking along very constructively” on the transhipment decision, as Hungary is a landlocked country and its own economy would not be impacted by the proposed measures.