Bloomberg: Germany still trades Russian LNG as canceling costs over $10 billion.

Germany's state-owned company continues to ship Russian liquified natural gas (LNG) to India, as canceling the contract could cost over £10 billion in taxpayer money, Bloomberg reported on Oct.

20, citing undisclosed sources. SEFE, a former unit of the Russian Gazprom nationalized by the German government last year, reportedly continues to fulfill its legacy 20-year contract from 2018 to ship out Russian LNG from the Yamal facility. The firm also has a separate contract to supply the Indian state company GAIL Ltd., Bloomberg noted.

The outlet stressed that the shipments in question are not subject to international sanctions. Should SEFE decide to breach the contract, it could cost Berlin at least 10 billion euros (£10.6 billion) in damages and penalties, which is more than the £6.7-£8.2 billion paid for the company's bailout, Bloomberg's sources said. Based on the contract, the German firm is obliged to pay for the Russian gas regardless of whether it is transporting it or not.

If it decided not to transport Russian cargo, Moscow could sell it elsewhere and still demand payments from SEFE, thus increasing its profit, Bloomberg explained. Despite Europe's pledge to wean itself off Russian fossil fuels following the invasion of Ukraine, several EU members have begun importing record amounts of Russian LNG in 2023. The Global Witness NGO reported in August that Spain and Belgium are among the world's leading importers of Russia's liquified natural gas.

However, despite being hooked on Russian gas for years, Europe managed to reduce the pipeline gas imports and decreased the share of Russian gas in the EU's energy mix from 40% to 10% in a year.

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News Editor

Martin Fornusek is a news editor at the Kyiv Independent.

He has previously worked as a news content editor at the media company Newsmatics and is a contributor to Euromaidan Press.

He also volunteers as an editor and translator at the Czech-language version of Ukrainer.

Martin studied at Masaryk University in Brno, Czechia, holding a bachelor's degree in security studies and history and a master's degree in conflict and democracy studies.