Europe has been turning a blind eye to a fifth of Russia’s LNG output that is flowing through EU ports, either to be consumed by member states or sent on to customers around the world, in what is a lucrative trade for the Kremlin.

Since the start of the war in Ukraine, the EU has been trying to wean itself off Russian energy, but the hard to replace gas has been the most problematic. The destruction of the Nord Stream 1&2 pipelines last year removed a large part of Russian gas imports, but gas still arrives via pipelines through Ukraine and Turkey. However, imports of LNG have soared and remain unsanctioned. Europe remains hooked on Russian gas.

That might change soon as the EU is debating introducing sanctions on LNG in the upcoming fourteenth sanctions package, but as reported by bne IntelliNews the new rules on LNG imports are vague and will be left to member states to choose to implement. The upshot is that Russian LNG imports are unlikely to change in the near term.

Despite ambitions set out in the EU’s REPowerEU plan, European terminals are not only importing Russian LNG but are also facilitating transshipments to other markets, enabling Russia to evade sanctions and restrictions.

Transshipments remain a big loophole at European LNG terminals and often aren't counted in official import figures, allowing policymakers to ignore this part of Russian imports. When LNG is unloaded, stored, and later re-exported, it may be classified as an import despite not entering the importing nation's energy network. The blurred classification results in Russian LNG moving through EU ports largely unnoticed. Of all the Russian LNG that was received by Belgium and France between January and September 2023, 37% was transshipped, according to a note from the Institute for Energy Economics and Financial Analysis.

Spain leads European imports of Russian LNG with 5.21bn cubic metres between January and September 2023, followed by France (3.19 bcm) and Belgium (3.14 bcm). Although France managed to reduce its Russian LNG imports, Belgium and Spain significantly increased theirs by 50% over the same period last year. The EU imported 13.98 bcm from January to September 2023 alone.

Belgium’s Zeebrugge terminal, France’s Montoir-de-Bretagne facility and Spain’s Bilbao port were the primary receivers of LNG from Russia’s Yamal project. From January to September 2023, the Zeebrugge terminal handled almost twice as much LNG from Yamal than was directly imported (2.73 bcm), largely due to continued transshipments. About 90% of this transshipped LNG went to non-EU markets, according to Kpler.

This contrasts with the Netherlands, which has stopped offering transshipment services for Russian LNG, and the UK, which has banned Russian imports of the fuel altogether.

Spain has emerged as a key importer of Russian LNG, with imports reaching 5.21 bcm in the first nine months of 2023 alone, surpassing last year's total of 4.99 bcm. Russia is now Spain's second-largest LNG supplier after the US However, the origin of LNG re-exports remains unclear, suggesting a significant portion may also be of Russian origin.

And Russia is making a lot of money sending LNG to Europe. In 2022, the EU's expenditure on Russian gas and LNG more than doubled due to the price crisis, reaching €16.1bn. Payments for LNG imports alone tripled to €6.2bn, raising questions about how much more non-European countries pay for Russian LNG transshipped through Zeebrugge and Montoir-de-Bretagne.

The EU’s continued facilitation of Russian LNG transshipments undermines its aim to be independent of Russian fossil fuels by 2027.