The import ban on Russian helium into Europe has come into force today (26th September).
While Russia accounts for only a small percentage of the bloc’s helium imports, the measure is another significant move in the continent’s efforts to boost energy security and will impact global helium trade flows, while serving as a symbolic gesture to Russia that Europe isn’t letting up in its sanctions drive as it strives to weaken Russia’s ability to finance its war with Ukraine.
The 14th package of sanctions, announced in June, contained important energy-related measures targeting liquified natural gas (LNG), and measures targeting vessels which support Russia’s war.
The package prohibits all future investments in, and exports to, LNG projects under construction in Russia. It will also prohibit, after a transition period of nine months, the use of EU ports for the transshipment of Russian LNG. Moreover, it prohibits the import of Russian LNG into specific terminals which are not connected to the EU gas pipeline network.
The new measures are designed to close loopholes involving subsidiaries in third countries, and prevent any trades or transactions involving EU sanctioned products, regardless of how European companies are structured with intermediaries or representatives in other markets.
A key new clause states that EU companies now have to undertake ‘their best efforts’ to ensure they do not participate in activities that undermine EU sanctions.
Financial sanctions are also strengthened by introducing a ban for EU banks outside Russia to use Russia’s SPFS financial messaging system, the Russian equivalent of SWIFT. It also allows the Council to draw up a list of non-Russian third country banks connected to SPFS who will be banned from doing business with EU operators.
According to the European Commission, since February 2022 the EU has banned over €48bn in goods that would have been exported to Russia and €91.2bn in goods that would have been imported.
Agathe Demarais, Senior Policy Fellow at the European Council on Foreign Relations, said Europe’s move on helium is calculated, since Gazprom, Russia’s state-owned energy giant, is building new helium plants in Siberia.
“These production lines will support Moscow’s plans to become the third largest helium manufacturer by 2025. With sanctions on Russian helium, the bloc would be playing the long game – taking a pre-emptive step to prevent any future dependence on Russian shipments.”
Phil Kornbluth, of Kornbluth Helium Consulting, said that the new supply from Gazprom’s Amur Gas Processing Plant, which came back online in September 2023, has added about 10% to global supply and, even with new EU sanctions on Russian helium coming into force, most of that supply should still find ready buyers in non-sanctioning countries and feed into the global picture.
But he added that the supply-and-demand fundamentals pointed toward plentiful supply for an extended period. “Gazprom has two more trains that will land at some point. The second of these could start up in 2025,” he said.
Russia currently produces bulk liquid helium from three different sources. Gazprom produces helium at its Amur gas processing plant in Eastern Siberia and another gas processing plant located in Orenburg, while Irkutsk Oil Company produces helium from its Yaraktinsky Plant located in the Ural Region. These sources currently account for approximately 12-13% of global supply.
With restrictions tightening in the west, Russia has been strengthening trading links eastwards, particularly China and India.
China’s imports of Russian LNG during the first nine months of 2023 grew 47% to 6.2m MT, equivalent to about 8.5 bcm, according to an Energy Innovation Reform Project paper published in March.
LNG-related prohibitions
- Prohibition on reloading services for the purposes of transshipment operations for Russian LNG, including onward transportation to third countries. This covers both ship-to-ship transfers and ship-to-shore transfers, as well as re-loading operations, and does not affect import but only re-export to third countries via the EU.
- Ban on new investments, as well as the provision of goods, technology and services for the completion of LNG projects under construction in Russia, such as Arctic LNG 2 and Murmansk LNG.
- Prohibition to purchase or import Russia LNG through terminals not connected to the European interconnected gas system.
Read more on Russia sanctions in Hot Topic in the October issue of gasworld global
