EU seeks legal paths to end Russian gas contracts without penalties
The European Commission is examining whether there are legal options that would allow European companies to terminate long-term gas contracts with Russia without incurring hefty contractual penalties, reported the "Financial Times," citing three EU sources.
As the newspaper reported, the EC is analyzing existing agreements on the import of Russian natural gas and the possibility of invoking a force majeure clause that would allow European importers to break contracts.
The difficulty lies in the fact that gas import contracts are confidential and often differ from each other. Citing the ongoing war in Ukraine as an argument to invoke a force majeure clause, which would permit contract termination, may legally prove insufficient, emphasized the source cited by the newspaper.
The withdrawal of EU importers from contracts for Russian gas is part of a larger plan, a "roadmap," for the EU to move away from Russian fossil fuels by 2027. This plan aims for the Union to become independent from Russian gas supplies and deprive the Kremlin of revenues it uses to wage war against Ukraine.
EU countries paid Russia $23 billion for oil and gas from February 2024 to February 2025, the British newspaper highlighted, citing calculations from the Centre for Research in Energy and Clean Air.
Currently, Russian gas accounts for 11% of the gas supplies delivered to EU countries via pipelines, down from about 40% in 2022. At the same time, over the past three years, the supply of Russian liquefied natural gas (LNG) has significantly increased.
The EU has halted 90% of oil imports from Russia and banned the import of Russian coal, but has not included Russian natural gas in this ban. Imports of the latter resource from Russia to Europe have increased by approximately 60% over the past three years, although they still remain at the lowest level since 2022, reminded the "FT."
Initially, the EU "roadmap" was supposed to be published as early as March, but publication was delayed due to fears that Hungary and Slovakia, which receive most of their gas through pipelines from Russia to the EU, would block it. The government in Budapest threatened to reject the adoption of EU sanctions on gas from Russia. A decision on this matter requires unanimous consent from all 27 EU member states.
European Commission President Ursula von der Leyen told the "FT" that the plan is expected to be released "within three to four weeks."
EU countries are afraid of forcing companies to break contracts
Despite pressure from Brussels, EU countries fear forcing companies to break contracts with Russia for LNG supplies. They are concerned about rising liquefied gas prices, as companies will struggle with high costs and geopolitical uncertainty.
The European Commission has granted EU countries powers that allow them to prevent Russian and Belarusian operators from connecting to port infrastructure or transporting gas via EU pipelines. According to governments, however, this solution does not provide them with legal means strong enough to compel companies to break contracts.
The main ports where Russian LNG is delivered to the EU are located in France, Spain, and Belgium. Russian liquefied gas plant Yamal LNG still has contracts with some of the largest energy companies in Europe, including Britain's Shell and Spain's Naturgy, emphasized the "FT."
