The EU is continuing to grapple with the complex challenge of eliminating its remaining oil and gas imports from Russia, as the European Commission prepares to unveil a roadmap this week outlining how to achieve that goal, hopefully by 2027.

Severing LNG ties with Russia will prove particularly difficult. While pipeline imports of Russian oil and gas have plummeted over the past three years, LNG imports have gone in the opposite direction. The bloc imported a record 16.7mn tonnes of Russian LNG in 2024, up from 15.2mn tonnes in both 2023 and 2022. Elevated gas prices have also translated into higher revenues for Moscow – Eurostat data shows that in Q4 2024, the EU paid 274% more on average for Russian LNG than it did in Q1 2021.

The EU’s ban on the transhipment of Russian LNG at its ports took effect in April, leaving its own LNG imports unaffected. While total Russian LNG shipments so far remain unimpacted, this measure will likely raise its transport costs. Russia’s reliance on ice-class tankers to carry LNG from Arctic terminals means it can no longer easily switch cargoes to conventional carriers at EU ports, and it is increasingly resorting to complex and risk-prone ship-to-ship transfers in international waters.

Over the summer, Russia may redirect more LNG eastwards from Yamal via the Northern Sea Route to offset the loss of EU port access. But that option narrows significantly in winter when sea ice returns.

Paradoxically, the transhipment ban could lead to more Russian LNG reaching the EU – at least temporarily – unless further restrictions are imposed. NewsBase understands that Brussels is exploring a potential ban on spot purchases of Russian LNG. However, this would only target a minority of current volumes. Around two-thirds of Russian LNG imported by the EU in 2024 was delivered under long-term contracts, primarily to buyers such as France’s TotalEnergies, a stakeholder in Yamal LNG.

Terminating these long-term contracts is significantly more complex. According to Reuters, the European Commission is examining legal avenues for allowing companies to invoke force majeure as a basis to exit contracts without penalties, while also preventing new agreements from being signed. But analysts and legal experts warn that this may lack a firm legal footing, as over three years have passed since the EU first committed to phasing out Russian fossil fuels in response to the invasion of Ukraine.

Even if such legal grounds were established, it's unclear whether companies would act on them. TotalEnergies, for instance, has indicated it will continue sourcing Russian LNG, citing both persistently high European gas prices and the imperative to safeguard energy security.

Indeed, gas prices in Europe remain abnormally high relative to global benchmarks and pre-war levels, a situation exacerbated by the loss of Russian pipeline supply via Ukraine earlier this year. In response, the European Commission has signalled that it may offer member states more leeway in meeting gas storage obligations this summer to temper price pressure – though details are still pending. In line with this, Germany announced in late April that it would lower its national gas storage targets, aiming to curb what it described as excessive speculation on the gas market, and seemingly anticipating broader regulation easing from Brussels.

In global LNG news, there’s some positive momentum at the Louisiana LNG project, where operator Woodside announced a final investment decision (FID) in late April on the first 16.5mn tonne-per-year (tpy) phase – a major milestone amid volatile gas markets and growing macroeconomic uncertainty, including that stemming from the Trump administration’s erratic tariff-driven diplomacy (see full story above).

Louisiana LNG represents a long-delayed project finally moving forward under experienced management. Formerly known as Driftwood LNG, it languished for years under Tellurian Energy, which Woodside acquired last October. Tellurian’s unconventional commercial strategy – offering LNG indexed to JKM and TTF rather than the standard Henry Hub benchmark – failed to attract buyers. As a result, key offtake deals with TotalEnergies, Gunvor, Vitol and Shell were cancelled in 2021–22, undermining the company’s ability to secure project financing.

Investor frustration mounted, culminating in the ouster of co-founder and chairman Charif Souki in December 2022. Despite receiving full regulatory approval, the project remained stalled. In 2024, the Federal Energy Regulatory Commission (FERC) extended Driftwood’s construction deadline by three years to April 2029, underscoring doubts about the project’s viability.

By mid-2024, Tellurian’s market capitalisation had collapsed from nearly $3bn in 2017 to under $500mn. It tried to alleviate its financial difficulties through the $260mn sale of upstream assets to Aethon Energy in May 2024, but this proved insufficient. Ultimately, the company accepted a $1.2bn takeover offer from Woodside, which included $900mn in cash and assumption of debt – representing a 75% premium over Tellurian’s then-market value.