According to a recent Bloomberg report, Germany is still transporting Russian liquefied natural gas (LNG), despite its commitment to reduce energy ties with the sanctioned country. This has sparked criticism as it contradicts Germany’s pledge to stop using Russian gas.
Securing Energy for Europe (SEFE), a former unit of Gazprom Germania based in Berlin, is currently shipping Russian LNG from the Yamal plant as part of a pre-existing contract. This agreement was made before German authorities took control and nationalized Gazprom’s subsidiary last year due to anti-Russia sanctions.
Although the LNG cargo is intended for India and is not subject to Western sanctions, the state-owned German company has faced backlash for maintaining energy ties with Russia. Christian Leye, a member of parliament from the Left Party, stated, “This contradicts pretty much everything the German government has said on the subject in the past. The economic entanglements with Russia are apparently not as easy to resolve as politicians would have us believe.”
SEFE received a shipment from the Yamal liquefaction plant in early October using their tanker, the Amur River. The LNG is being transported to India as part of a separate long-term agreement with the Indian company GAIL.
However, canceling the existing contract with Russia could prove costly for German taxpayers. The takeover of Gazprom Germania last year cost between €6.3 billion and €7.7 billion. If the contract with Russia is terminated, rough estimates suggest that the cost of damage and penalties could exceed €10 billion, making it unlikely for Germany to take such action.
SEFE spokesperson stated that the long-term supply contract with Yamal LNG includes strict penalties and liability consequences if contractual obligations are not met. They declined to comment on specific conditions.
The continuation of LNG shipments between Germany and Russia highlights the complexities of disentangling energy ties between the two countries. Despite Germany’s commitment to reduce its reliance on Russian gas, existing contracts and financial obligations make a complete separation difficult.
Critics argue that Germany’s actions highlight a gap between political rhetoric and economic reality. While politicians may publicly condemn energy ties with Russia, the financial implications of breaking long-term contracts and incurring penalties make it challenging to fully sever these connections.
Germany’s ongoing transportation of Russian LNG emphasizes the complexities and limitations of energy disengagement. As the country tries to diversify its energy sources and reduce dependency on Russia, it must navigate the financial and logistical challenges associated with existing contracts and obligations.