Draining Putin’s war chest

Anyone who imports or trades Russian gas – whether in gaseous or liquid form – is supporting Putin’s criminal actions in Ukraine. If we want peace in Europe, it is crucial to cut off Putin’s money supply, write Andrii Zhupanyn and Anton Hofreiter.

Andrii Zhupanyn is Member of the Verkhovna Rada, the unicameral parliament of Ukraine, where he is Chairman of the Subcommittee on Natural Gas. Anton Hofreiter is Member of the Bundestag, the German lower house of Parliament, where he is Chairman of the Committee on European Affairs.

Since Russia’s invasion, Ukraine has been fighting for the survival of its state, its nation and its culture. The EU and the USA are firmly on Ukraine’s side and are supporting the country economically, with humanitarian aid and extensive arms deliveries.

At the same time, the EU, above all Germany, began a late but all the faster learning process. We have learned the hard way: If Europe makes itself unilaterally dependent on autocratic systems, we endanger our own security.

In an enormous feat of strength, the German government corrected the wrong decisions of past decades and made Germany independent of Russian natural gas within a very short time. While no more natural gas has been flowing through the Nord Stream pipelines for over a year,

Russia continues to supply natural gas to Europe – as liquefied natural gas by LNG tankers. Russia already increased its LNG exports to Europe by 30% last year. By 2030, Russia plans to triple its liquefied natural gas deliveries to 100 million tons per year.

Therefore Russia is massively expanding its infrastructure in the Arctic. With the help of the former constituent of DAX benchmark Linde and the French company Technip, the first part of Arctic LNG 2 project was built in 2022, even after Russian troops invaded Ukraine.

The technical support of the two European companies made it possible to put the first of three Russian LNG export terminal blocks into operation in July 2023. Putin himself was present at the commissioning ceremony. In October, the Russian president gave the green light for the construction of another large LNG terminal in Murmansk.

The Russian liquefied natural gas business is largely operated by Novatek, a group owned by the oligarchs Mikhelson and Timchenko, who have close ties to Putin. Novatek controls 50.1% of the Russian Yamal LNG terminal and is expanding further with the construction of the terminal on the Gydan peninsula in western Siberia.

The company, which is currently preparing to expand into world markets, is even directly involved in the Russian war of aggression. There are reports that the company’s security guards form their own mercenary group.

This makes it even more worrying that, despite the EU’s promise to end its dependence on Russian fossil fuels, some countries, including Belgium, France and Spain, have significantly increased their imports of Russian LNG. Some Russian gas also reaches Germany via Belgium.

But Europe is not only importing Russian LNG, it is also helping to resell Russian liquefied natural gas in non-EU countries. A significant proportion is transshipped in European ports and shipped to countries such as India and China. In 2022, the Belgian gas network operator Fluxys handled 72% of all Russian LNG transshipments in the EU, which were mainly destined for non-EU countries.

The fact that the Federal Republic of Germany is involved in the trade in Russian liquefied natural gas with the help of the LNG tanker Amur River runs counter to our own security interests and is completely unacceptable. The “Amur River” belongs to the company SEFE, which was nationalised last year as part of Gazprom Germania. The ship continues to transport Russian gas around the world on the basis of old contracts. This practice must be ended as soon as possible. Anyone who still dismisses gas business with Russia in 2023 as a private commercial matter is a dangerous denier of reality.

Trade in Russian LNG runs counter to our very own security interests. Russian gas exports fill the Russian state budget, a third of which now flows into the military and thus directly into the war of aggression.

Just to make it clear: Anyone who imports and trades in Russian liquid gas is supporting Putin’s criminal actions in Ukraine. We in Europe must be clear about this: The Russian president has not given up his war aims. He is counting on holding his breath. If we want peace in Europe, it is crucial to cut off Putin’s money supply.

It is high time for the European Commission and the governments of the Member States to take concrete measures to implement the common goal of stopping all imports of Russian fossil fuels following the recommendations provided by the European Parliament in the latest resolution.

Energy Commissioner Kadri Simson’s announcement in September that she would authorise Member States to ban Russian LNG individually is not enough. We must sanction Russian LNG collectively, not a drop of Russian LNG must be unloaded or transshipped in European ports.

When it comes to our collective security, we in Europe must also take these measures together. The latest US sanctions against the Russian LNG infrastructure point the way forward.

We do not need Russian LNG in Europe. Demand for gas has reached a record low this year and our gas storage facilities are almost fully utilised with a fill level of 99%. We are in a position to diversify our energy sources and can further reduce our dependence on natural gas by accelerating the use of heat pumps and carrying out energy-efficient modernisations. Instead of continuing to fill Putin’s war chest, renewables in Europe must be expanded even faster.

All of this is not just for our own security. It also protects the climate. Because if we want to meet the Paris climate targets and to avoid climate breakdown, we have to make sure that Russian gas stays in the ground.