Landlocked European Nations Face Gas Woes Amid Growing Pressure on Russia

A ship carrying liquified natural gas (LNG) arrives at Mukran Port in Sassnitz, Germany, on Nov. 23, 2022. Sean Gallup/Getty Images

News Analysis

A group of European Union (EU) countries is calling for tougher regulations on Russian liquid natural gas (LNG) imports, a move that could impact energy supplies across Central and Eastern European nations.

The countries push for more rules as the EU tries to reduce its dependence on Russian energy amid ongoing tensions with Moscow over the Russia–Ukraine conflict.

The proposed rules would require more detailed reporting on Russian liquid natural gas in storage and reloaded cargoes.

While aimed at reducing reliance on Russian energy, the measures could create challenges for landlocked countries in Central and Eastern Europe that have limited alternatives to Russian gas.

A view towards Nord Stream 1 Baltic Sea pipeline and the transfer station of the Baltic Sea Pipeline Link, in the industrial area of Lubmin, Germany, on Aug. 30, 2022. Lisi Niesner/Reuters

Sanctions

Liquid natural gas, which is transported by sea in specialized tankers, has become increasingly important for Europe’s energy supply. Major ports in France, Belgium, and Spain receive liquid natural gas shipments, which are then converted back to gas and distributed across the continent.

As liquid natural gas imports have surged, a former senior EU senior official says that the era of relying on Russian gas pipelines is ending. However, critics argue that the EU is pushing some landlocked nations like Hungary to move away from Russian natural gas too quickly.

With increased sanctions on liquid natural gas imports by sea—imports that would ultimately reach these landlocked countries—their fuel supplies could become even tighter and more expensive.

Currently, although the EU has largely banned Russian oil imports, there are no EU-wide sanctions on purchasing Russian gas. The European Commission, EU’s main executive body, has urged member states to reduce imports to avoid what it sees as financing the Kremlin’s war chest.

The EU has adopted targeted measures that ban the transfer of Russian liquid natural gas between ships in European ports for further delivery. Those measures will go into effect in 2025.

On Monday, in a letter sent to the European Commission, France and the Baltic states urged the EU to go further. The proposed stronger reporting rules would require storage operators to provide information on the portion of Russian liquid natural gas in reloaded cargoes, and would ask storage operators to monitor its origin.

“Belgium will file and we will support an initiative to ban and track [liquid natural gas] imports from Russia more structurally,” Kai Mykkanen, Finland’s climate and environment minister, told reporters ahead of a meeting.

Moving Away From Russian Pipeline Gas

The shift in Europe’s energy landscape has been driven by both practical supply needs and geopolitical pressures.

The International Energy Agency recently reported that global natural gas demand is expected to reach new highs in 2024 and 2025. This growth, combined with limited increases in liquid natural gas production, is contributing to tight supplies, it said.

In addition, the agency also labeled the future of gas supplies through the Ukraine-Russia pipeline a “key uncertainty” for Europe this winter.

Despite the war, gas has continued to be piped through Ukraine from Russia. In 2023, Austria, Hungary, and Slovakia—all landlocked countries—met 65 percent of their gas demand with gas from the Ukraine pipeline.

However, on Jan. 1, 2025, the major contract governing that transit will end.

Along with the increased demand and tight supplies, there has been a significant move away from Russian pipeline gas among EU countries overall.

EU data shows that Russia’s share of the EU’s pipeline gas imports dropped from over 40 percent in 2021 to about 8 percent in 2023. When including both pipeline and liquid gas, Russia accounted for just 15 percent of total EU gas imports in 2023.

However, the transition has been particularly challenging for landlocked countries like Austria, Slovakia, and Hungary, which have historically relied heavily on Russian pipeline gas via the Ukrainian transit route. In 2023, the three countries met 65 percent of their gas demand with gas from the Ukraine pipeline.

For instance, Austria’s usage of Russian gas remains at 95 percent, compared to 14 percent in the rest of the EU. Hungary still sources about two-thirds of its gas imports from Russia.

If countries lack forward planning, reliance on liquid natural gas may lead to more expensive contracts compared to Moscow’s pipeline gas. In a 2023 report, the Baker Institute for Public Policy, an American think tank, said that European buyers’ “general avoidance of long-term contracts” means they might be willing to bid higher when they need liquid gas, driving up prices.

‘Ideological Framework’

Yann Caspar, a researcher at the Mathias Corvinus Collegium Centre for European Studies, told The Epoch Times that France, Spain, and Belgium continue to purchase Russian liquid gas in large volumes for the European market.

His research found that landlocked countries are urged to seek alternatives to Russian supplies, facing more scrutiny from EU institutions—while France, Belgium, and Spain are seen as more openly aligned with the EU’s goals of reducing reliance on Russian energy sources.

These coastal countries are able to reduce their reliance on piped gas because of their ability to import liquid natural gas by sea.

“There is a double standard, complete hypocrisy,” Caspar said. He said that energy policy should be approached realistically.

“You have to have a very realistic approach. It’s not possible to put some ideological framework on energy questions. This is very dangerous,” Caspar said.

He acknowledged the need for diversification but questioned its feasibility for landlocked nations like Hungary.

“For a small country that doesn’t have any access to the sea, it’s not possible, in the short term, to change everything,” Caspar said.

‘Not Feasible’

Last month, Hungary’s deputy state secretary for energy security, Csaba Marosvari, criticized the EU for not providing sufficient support to help transition away from Russian natural gas.

“In our region, there are small countries, small markets, few significant market players, lack of capital; these kinds of infrastructure and de-bottlenecking projects can cost up to hundreds of millions of euros—in fuel market terms, it is not feasible to fulfill,” he told attendees at the Gastech conference in Houston in September.

Marosvari said that the European Commission’s focus on financing green energy projects has inadvertently left some countries without the necessary support for diversification.

“As a result of the war in Ukraine, we received stronger and stronger pressure to diversify faster away from Russian fuels, but they deny the funds to be able to do that,” he said.

‘Energy Changer’

Samuel Furfari was formerly a senior official at the EU’s Energy Directorate-General from 1982 to 2018. Furfari described liquid natural gas as “the energy changer.”

He told The Epoch Times that the current situation will “stimulate new supplier countries because, in the past, gas pipelines were considered to be the only means of transport.”

“That’s over now,” he said.

Expressing skepticism about future predictions, Furfari noted that no one could have anticipated the events surrounding the Nord Stream pipelines—major pipelines between Germany and Russia that were blown up in September 2022.

Although Furfari was hesitant to predict future developments in the energy sector, he said, “It’s a fantasy to say that we will decarbonize.”

“We need to decide if we want to keep our freedom, or keep our well-being, or to fight for climate change. It’s impossible to keep the three,” he said.

When reached for comment, an EU Commission spokesman directed The Epoch Times to an Oct. 15 meeting among EU Energy ministers, at which they emphasized an “objective of keeping energy costs affordable and competitive without losing sight of the need for decarbonisation and energy security.”

Reuters contributed to this report.