2024-04-12 10:41:58
Discontent is brewing across Europe as new figures show France is quietly increasing gas payments to Russia, while the country’s president, Emmanuel Macron, is vocal as one of Ukraine’s staunchest defenders.
In the first three months of this year, Russian liquefied natural gas supplies to France increased more than to any other EU country compared to last year, according to data analyzed by the Center for Research on Energy and Clean Air (CREA).
According to the received data, since the beginning of the year, Paris has paid the Kremlin a total of more than 600 million. euros for gas supplies, which led to calls for France to limit its increasing gas purchases.
“It cannot be the case that France, on the one hand, says that we must be strict with Russia, and on the other hand, pays it a lot of money,” said a diplomat from an EU country, who wished to remain anonymous.
Paris has increasingly traded gas with Russia, although Macron has sought to take a harder line in support of Kiev, two years after Moscow first launched a full-scale invasion of the neighboring country.
Last month, the French president refused to rule out sending troops to Ukraine and urged allies not to be “cowards” in defending Kiev, a sharp departure from his earlier calls not to “humiliate” Russian leader Vladimir Putin.
France insists that the gas it buys is necessary to ensure the supply of gas to households across Europe and that it has a long-term deal with Russia that is legally difficult to renege on. But critics said Paris could do more to reduce purchases of the bloc and argued its inaction was partly due to opposition from France’s national energy company TotalEnergies.
In any case, the imports show that EU efforts to curb Russia’s fossil fuel revenues, which account for nearly half of the Kremlin’s budget, are weakening as Moscow finds ever more inventive ways to circumvent existing measures and EU sanctions languish.
“This is not an easy topic,” admitted an official of the French Ministry of Energy. “If we continue to pay for gas that we don’t import, it doesn’t make sense,” referring to long-term contracts signed by TotalEnergies that force it to buy liquefied natural gas from Russia.
The uniqueness of France
A few months after the 2022 Russia has launched a large-scale invasion against Ukraine, the EU has presented a plan for how by 2027 end the bloc’s dependence on Moscow’s fossil fuel imports.
So far, it has been largely successful. While some EU countries continue to buy nuclear fuel and some oil and gas pipelines from Russia, the bloc has cut its dependence on gas supplies from Moscow by about two-thirds and imposed a blanket ban on coal and oil imports by sea.
But similar efforts to phase out liquefied natural gas (LNG) have failed. Although this fuel accounted for only five percent of EU gas consumption last year, EU countries paid Moscow more than 8 billion for its export. euros, according to a new CREA report published on Thursday.
France is far from the only culprit. Shipping data shows that at least nine EU countries continue to buy Russian LNG. However, Paris leads the bloc in terms of absolute 2024. imported quantity – a total of 1.5 million tons – both according to the increase in purchases compared to the same period last year.
EU dependence on Russian liquefied natural gas
Belgium, Spain and the Netherlands – Moscow’s three biggest buyers of liquefied natural gas after France – have said they would support steps to reduce purchases of the gas, but say everyone must act together or it will be futile.
“The only solution is a joint agreement to reduce or ban imports,” Spanish Energy Minister Teresa Ribera told reporters at a meeting of EU energy ministers last month. “We need it as soon as possible.”
At the same meeting, Lithuania even proposed a complete ban on the import of Russian liquefied natural gas.
But Paris has largely taken no action.
In fact, French Economy Minister Bruno Le Maire defended the purchases made by Paris. He told lawmakers this month that France should gradually wean itself off dependence on Moscow-supplied gas to avoid “too violent a market impact” and price spikes.
Such a restrained reaction is unconvincing to energy researchers, who are skeptical of claims that the withdrawal of Russian gas would shock markets.
Phuc-Vinh Nguyen, an energy analyst at the Paris-based Jacques Delors Institute, argued that the French government was simply “not interested in talking about it” because it was at odds with Macron’s renewed push to help Ukraine. “Shame on them.”
A spokesman for the French economy ministry told Politico that the price of Russian gas rose in part because of strikes that “severely disrupted” normal gas flows last year.
Paris also regularly discusses efforts to reduce Russian fossil fuel imports with its EU allies, the spokesman added, noting that large volumes of gas travel through France and help supply other countries such as Italy.
The government is “exploring alternative supply options without jeopardizing Europe’s energy security,” the spokesman added, stressing that Paris supports a complete gas phase-out by 2027.
A total blockade?
But embarrassment is not the only reason France is delaying cutting Russian gas imports.
French energy giant TotalEnergies owns 20 percent. shares in the Yamal LNG project, which operates a liquefaction plant in northwestern Siberia, and is controlled by the Russian private energy company Novatek. According to the long-term contract, the French company is forced to pay annually until 2032. buy at least 4 million from the factory tons of liquefied natural gas.
The company’s chief executive, Patrick Pouyanné, has publicly called the EU’s ban on buying Russian liquefied natural gas “unjustified” until 2025 or 2026, when new liquefied natural gas projects around the world, including in the U.S., come online.
Energy analyst Phuc-Vinh Nguyen said TotalEnergies, as an energy giant and one of France’s largest companies, is being listened to very closely by the government.
This indifference can be seen elsewhere.
In the Netherlands, where TotalEnergies also has a long-term contract with Jamal LNG, the government has sent several requests asking the company to voluntarily cut imports from 2022, according to a Dutch official.
“They never answered us,” the official testified.
A spokesman for TotalEnergies declined to comment on discussions with the Dutch government, but confirmed to Politico that the company complies with EU law and “does not engage in any anti-sanctions lobbying activities.”
The spokesman also said the company had not sold its Yamal LNG stake to help protect Europe’s energy supply, arguing that “supply remains tight in the global LNG market.”
The French economy ministry said the Russian LNG “issue is not related to the TotalEnergies contract or activities, but to the possibility and risk of new sanctions being imposed on the whole of the European Union”.
However, experts do not believe this.
Analyst Phuc-Vinh Nguyen made a multi-layered argument. Firstly, there are alternative import possibilities, secondly, the French industry is now from 2022. consistently uses less gas, thirdly, the national gas storage level is higher than last year. Overall, this reduces the risk of supply shortages.
At the EU level, the bloc could also replace imports from Russia with supplies from places like the US, even if an “immediate” LNG ban “could raise market prices”. Aura Sabadus, senior gas market analyst of the market analysis company ICIS, spoke about it.
Non-existent success
The discussions are taking place at a time when the European Commission, the EU’s executive body, is starting to prepare another, already the 14th, package of sanctions against Russia.
However, liquefied natural gas is unlikely to be included in this package, despite repeated requests from the Baltic States and Poland. Hungary has historically opposed the gas measures, and sanctions must be approved by all 27 EU members.
“I doubt we’ll get unanimity on this,” admitted one senior European Commission official.
However, long-term contracts with Russian companies are another difficult issue for the EU.
These contracts often force energy companies to pay for a fixed amount of gas, even if they are no longer buying physical cargo from Russia anyway, said Doug Wood, who chairs the gas committee of the European Energy Traders Federation, a lobby group.
However, Mr Wood agreed that energy companies could reduce Russian gas imports to this minimum.
Alternatively, EU governments could impose a price ceiling on Russian LNG imports, the CREA report suggests. The analysis found that if the EU imposed a price ceiling of 17 euros per megawatt hour, Moscow’s liquefied natural gas revenues could drop by about a third, based on last year’s data.
But in principle, any solution will require consensus and coordinated action – at least from the EU’s biggest importing countries – so that Russian gas flows are not simply diverted, Wood said.
In order to achieve this, the support of France is also needed.
“So now we’ll see over time: whether [vis stipresnė Prancūzijos parama Ukrainai] is rhetoric justified or just empty words? said the EU diplomat. – It is very difficult for me to understand that France is still silent. They have to come up with something.”
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2024-04-12 10:41:58