EU energy chief tells companies not to sign new Russian LNG deals

European Commissioner for Energy Kadri Simson attends a European Union energy ministers meeting on high energy prices, in Brussels, Belgium November 24, 2022. REUTERS/Johanna Geron

BRUSSELS, March 9 (Reuters) – European Union countries and companies should not sign new contracts to buy Russian liquefied natural gas, as part of the bloc’s attempt to end its energy dependence on Moscow, the EU’s energy policy chief said on Thursday.

Russia curbed gas supplies to Europe last year following its invasion of Ukraine, causing an energy crisis of squeezed supplies and record-high prices. The EU has vowed to quit Russian fossil fuels by 2027, and replaced around two-thirds of Russian gas last year.

But while Moscow slashed pipeline gas flows, deliveries of Russian liquefied natural gas to Europe increased last year – to 22 bcm, up from around 16 bcm in 2021, according to an EU analysis seen by Reuters.

“We can and should get rid of Russian gas completely as soon as possible, still keeping in mind our security of supply,” EU energy commissioner Kadri Simson told a meeting of EU lawmakers on Thursday.

“I encourage all member states and all companies to stop buying Russian LNG, and not to sign any new gas contracts with Russia once the existing contracts have expired,” Simson said, adding that this could also reassure other gas suppliers Europe is trying to negotiate deals with.

The LNG volumes were far lower than the 155 bcm of pipeline gas Moscow had sent Europe each year before the Ukraine war. Europe replaced most of those volumes with LNG from alternative suppliers like the United States, renewable energy and energy savings.

As EU countries begin preparations to secure energy supplies for next winter, Simson said the Commission would propose that EU countries extend, to next winter, a voluntary target to cut their winter gas consumption by 15%.

The EU appears on track to meet the goal this winter, having slashed its gas use by 19.3% from August to January, compared with in recent years.

While Europe looks set to avoid acute energy shortages this winter, the continent’s energy security remains delicate.

Russia is still sending some pipeline gas to Europe via Ukraine, enough to total 20bcm this year if current flows remain stable.

The International Energy Agency has warned that if Moscow cut those deliveries, China bought more LNG from global markets, and next winter was unusually cold, Europe could face fuel shortages – making it crucial that governments keep up efforts to save energy and boost renewable energy.

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