March 21, 2022 (IEEFA)—Revenue growth for Fluxys, Belgium’s regulated monopoly gas grid operator, has been driven recently by Russian liquefied natural gas (LNG) transshipments that ultimately wind up in Asian, Middle Eastern, and South American markets, according to a study by the Institute for Energy Economics and Financial Analysis.
The IEEFA report found the operator’s LNG terminal in Zeebrugge, originally designed to ensure a secure supply of gas for Belgium and Europe, has become a multi-shipper terminal that supplies liquefied natural gas to destinations around the world.
“Fluxys and its shareholders have profited by facilitating Russian exports of LNG to Asian, South American and Middle East markets, especially during the winter months,” said Ana Maria Jaller-Makarewicz, an IEEFA Europe energy analyst and author of the report. “It’s exacerbated the European energy crisis and is contributing to the profit margins of Russian fossil fuel projects.”
Qatar has been the main supplier of LNG to Belgium since 2007, but there has been a significant increase in Russian LNG from its Yamal plant in the Siberian Arctic since 2018. A storage tank solely to support a 20-year transshipment contract with Yamal LNG was built in Zeebrugge in 2019, expanding the terminal’s LNG storage capacity by almost one-half. Since 2021, almost 90 percent of the total Yamal LNG exports that were transshipped at Zeebrugge have been sent to non-European markets.
“Fluxys is arguably working against Europe’s security of supply, enabling Russian LNG to be shipped to other markets in winter, even when stocks in Europe may be running low,” said Arjun Flora, IEEFA Europe director of financial analysis and a co-author of the report. “Fluxys is profiting from this trade, arguably to the detriment of European energy consumers.”
Ana Maria Jaller-Makarewicz ([email protected]) is an IEEFA Europe energy analyst
Arjun Flora ([email protected]) is IEEFA director of energy finance studies
Vivienne Heston ([email protected]), +1 (914) 439-8921
About IEEFA: The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. IEEFA’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.