US Freedom Molecules Go To Asia Not EU

The anticipated influx of liquefied natural gas (LNG) from the US to Europe, which was expected to replace Russian pipeline gas, is experiencing a decline in market share this year. Conversely, the share of Russian LNG in the EU is increasing. We are seeking to identify the countries in Europe where American LNG is being purchased and who in Europe is increasing its purchase of Russian gas.
In July, the European Union imported €565.7 million worth of Russian liquefied natural gas (LNG), representing the highest level since late winter and a 13.5% increase. Spain was the primary purchaser, increasing its acquisitions by 2.3 times to €240.8 million. Furthermore, the Netherlands has also increased its purchases of Russian LNG by a quarter.

France and Belgium, however, saw a reduction in purchases. France retains its position as the second largest importer of Russian LNG, although its purchases in July fell by 11% to €210.4 million. Belgium reduced its imports by 50% to 47.7 million euros.
In the first seven months of this year, the EU purchased €4 billion worth of LNG from Russia, a decrease from last year's €5.5 billion. However, the share of Russian LNG in the total volume of supplies to the EU increased from 13.3% to 18.6% due to a reduction in imports from other sources.
In particular, the US reduced its LNG supplies to the EU by 18% in July and by a third compared to the same period last year. In July, US revenues from LNG exports to the EU reached their lowest point since November 2021. The proportion of US LNG in the European market declined from 51.6% in 2023 to 44.1% in 2024. The US opted to supply a greater volume of LNG to the Asian market, where its market share increased to 36%.
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So why Spain and the Netherlands increased their purchases of Russian LNG while France and Belgium decreased them.

Belgium and France were, in fact, transshipment hubs for the re-export of Russian LNG. Novatek, while still constructing the Yamal LNG facility, entered into a contract with the Belgian port of Zeebrugge for the transshipment of goods.

LNG was delivered to this location by Arctic-class tankers and reloaded onto regular tankers, which then delivered the gas further to Asia. In France, Russian LNG was frequently transshipped from Arctic-class tankers to regular tankers. "This was convenient, first of all, for the shareholder of Yamal LNG, Total Energy, which used its ports for transshipment," states Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation and the National Energy Security Fund (NESF).
Please be aware that, due to the prohibition on LNG transshipment in EU ports, supplies to France and Belgium have been reduced. Nevertheless, the purchase of LNG from Russia for domestic use or for further pumping into Europe via pipelines remains an option. Spain and the Netherlands are capitalising on this opportunity by increasing their LNG imports from Russia.

Spain primarily consumes LNG for its own use, as transshipment was not feasible due to the distance involved. Ports in northwestern Europe were more suitable for this purpose, according to an expert in the field. Spain's Gas Natural Fenosa has a long-standing contract to purchase 3.2 billion cubic metres of LNG from Novatek's Yamal project for a period of 25 years, commencing in 2020.

Spain has been the primary purchaser of Russian LNG for the past two years, and it is not financially advantageous for them to terminate a significant long-term contract, according to remarks made by Russian Ambassador to Madrid Yuri Klimenko.

"The Netherlands purchases LNG from Russia for its own use and for further pumping through pipelines into Europe, as well as for delivery to Germany. "When Germany declined to purchase Russian pipeline gas, it partially switched to LNG from its neighbours, particularly the Netherlands," states Yushkov.
The growth in LNG supplies from Russia in July can also be attributed to the challenging ice conditions on the eastern section of the Northern Sea Route, which leads directly to Asia and bypasses Europe. In July, the ice-free conditions along the Northern Sea Route had not yet been established, making it challenging for Yamal LNG to sail along this route. In these circumstances, it was more convenient to rapidly unload the LNG in Europe and return to Yamal for a new batch. "Therefore, even despite lower gas prices in July on the European market, it was still profitable to ship to Europe from the Yamal LNG plant," states Yushkov.

However, the situation on the Northern Sea Route changed in August and September. "During this period, we will be sending more Yamal LNG to Asia along the eastern part of the Northern Sea Route, as the ice load decreases. Novatek has a contract with the Chinese company CNPC to supply 3 million tons of LNG per year. The optimal route for these volumes is the eastern part of the NSR, which is currently the shortest route.
The majority of Yamal LNG tankers have been redirected to Asia, utilising the Northern Sea Route navigation window. It is thought that this does not indicate a refusal by EU countries to accept Russian liquefied gas.

AIS data indicates that the majority of the fleet associated with Russia's largest LNG project, Yamal LNG, is currently operating on the Asian route along the Northern Sea Route. Consequently, 14 of the 26 tankers in the fleet are currently engaged in transporting cargo to Asia or returning from such a voyage. Concurrently, just three of the 15 Arc7 icebreaker-class tankers are currently deployed on European routes. Two additional vessels are undergoing scheduled maintenance in Denmark, according to the data.

This is a typical pattern for the Northern Sea Route, with high levels of navigation in the latter part of the summer and early autumn, reflecting the delivery of significant volumes of Yamal LNG to customers in Asia.

According to Montel, citing preliminary data from Kpler, European countries excluding Turkey imported approximately 0.7 million tonnes (0.95 billion cubic metres) from Russian ports this month, representing a decrease of 0.4 million tonnes from the previous month and the lowest level since August last year.

The price of LNG in Europe has fallen to $350 per thousand cubic metres this year. There was a sudden increase at the end of the summer due to the deterioration in the situation in the Kursk region and the risk of a complete halt in pipeline gas supplies through Ukrainian territory to Europe.

Global LNG began flowing from the European market to the Asian one, due to the higher price point in Asia. Companies and traders that export American LNG are solely concerned with price indicators. The decision on the destination of the gas is based on profitability considerations. "Therefore, when prices in Asia became higher than in Europe, LNG was redirected to Asia," Yushkov explains.

"When American or European politicians stated that American LNG would undoubtedly enter the European market and replace Russian gas, it was either an outright misrepresentation or the result of flawed decision-making by individual officials. It is not within the power of any individual or organisation to direct the destination of a company's gas.
It is standard practice for American companies to own gas liquefaction plants and to sell liquefaction capacities only. "The owners of this LNG then become traders – typically global or European companies that load LNG into tankers and decide where this gas from the USA will be distributed," states Igor Yushkov.

The United States shipped significant quantities of liquefied natural gas (LNG) to Asia during the summer months, when demand was driven by higher temperatures. The suspension of operations at the Freeport LNG plant in July due to Hurricane Beryl also had an impact on supplies. Meanwhile, the volume of gas reserves in underground storage facilities (UGS) in Europe exceeded 93%. "Russia's share grew naturally," states Albert Koroev, head of the stock market analysis at BCS World of Investments.
As reported , Gazprom increased its pipeline gas exports to Europe in 2024, while Russian LNG supplies to EU countries remained at the same level. Russia's overall share of EU gas imports has grown to an impressive 18%, according to European Commissioner for Energy Kadri Simson.
So as we can note the US's promise of unlimited quanties for freedom molecules to replace Russia gas was yet another of the lies told by the Americans and the EU should be grateful that Russia has not acted in a vindictive manner like the US and EU have towards it.
Its worth noting that how much longer will Europe be able to afford to buy gas from Russia given that its economies are drowning in debt,their currencies are collapsing and perhaps Russia will require payment in something other than fiat currencies.