Ship-to-ship transfer of Russian LNG from Yamal LNG near Honningsvåg on February 19, 2019. (Source: Courtesy of Kystverket / Norwegian Coastal Administration)
More than three years into the Ukraine War the EU has finally slammed the door shut to the transfer of Russian LNG across its terminals. Ukrainian officials have long called for the bloc to begin phasing out the Russian supercooled gas, but support in Brussels for a full-fledged ban remains haphazard.
The transshipment ban taking effect today represents the lowest common denominator the European Commission and its member states could agree to. The measure is part of the 14th round of sanctions against Russia announced in June 2024.
EU member states continue to send significant funds to Russia for the delivery of LNG from the Arctic Yamal project. In 2024 Russia managed to send 16.65m million tonnes of liquefied gas to the EU, a new record, totaling more $8 billion. Smaller volumes also originate from the Portovaya and the Cryogas Vysotsk LNG terminals, both in the Baltic Sea.
For several European states, the amount of funds they pay for LNG from Russia far exceeds the financial and military aid they provide to Ukraine. The sale of hydrocarbon resources, including gas from Yamal LNG to Europe, directly supports Russia’s federal budget and the financing of its war of aggression.
With the now-enacted transshipment ban the EU targets around 20 percent of Russian LNG arriving at its terminals. Key transfer hubs at Zeebrugge in Belgium and Montoir in France announced they will comply with the ban. Fluxys’ Zeebrugge terminal signed a 20-years agreement with Yamal LNG in 2015 for the transshipment of up to 8 million tonnes of LNG per year.
In 2024 Yamal LNG transshipped 3.3 million tonnes of LNG at EU terminals, with 2.5 million tonnes in Zeebrugge and the remainder at Montoir in France. Transshipping helps Yamal LNG optimize the use of its ice-capable Arc7 LNG carriers.
How effective the ban will ultimately be remains to be seen. Analysts have speculated that some volume of Russian LNG previously designated for transshipment to third countries will simply be sold into the European spot market. Spot sales increased from 23 percent to 33 percent of total imports in 2024.
Yamal LNG’s majority owner, Novatek, has also made preparations to transfer the transshipment point from Zeebrugge to the Kildin Island anchorage in the Murmansk region. It recently expanded ship-to-ship operations. In a typical year Kildin sees around a dozen STS transfers, a figure likely to double or triple in 2025.
In November the site saw three transshipments, followed by four in December and January 2025. Thus far there have already been 11 transfers at Kildin in 2025, according to Kpler, a data firm. The ship-to-ship transfers require careful schedule coordination between the two vessels and takes around 36 hours to complete.
For this purpose Novatek has been amassing a number of newbuild LNG carriers. Three vessels ordered from South Korean shipbuilder Hanwha by Mitsui OSK Lines in 2021 entered into service earlier this quarter. A fourth one will follow in the coming weeks.
The four North-series vessels, North Moon, North Ocean, North Light and North Valley, are controlled by Novatek under charter agreements and have begun to support ship-to-ship transfers at Kildin Island. North Light and North Ocean loaded cargo during STS transfers in mid-February and late-February and are now en route to Asia. North Moon completed a delivery to Dalian in China in mid-March.
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