EU evaluates legal routes to exit Russian gas contracts
The European Commission is investigating whether there are legal avenues that would permit European companies to break long-term gas contracts with Russia without incurring significant penalties, according to the newspaper "Financial Times," which cited three EU sources.
As reported by the newspaper, the EC is scrutinising the contracts for importing Russian natural gas and exploring the potential of invoking the force majeure clause, enabling European importers to terminate these contracts.
The challenge lies in the confidentiality and variability of the gas import contracts. Using the ongoing conflict in Ukraine as grounds to invoke the force majeure clause, facilitating contract terminations, may not hold sufficient legal weight, an EU source quoted by the newspaper stressed.
The withdrawal of EU importers from Russian gas contracts is part of a broader initiative, a "roadmap," for the EU to end its reliance on Russian fossil fuels by 2027. This strategy aims to render the Union independent of Russian gas supplies and curtail the Kremlin's revenue, which it uses to support the war against Ukraine.
EU countries paid Russia £18.8 billion for oil and gas from February 2024 to February 2025, the British newspaper highlighted, citing figures from the Centre for Research in Energy and Clean Air.
Currently, Russian gas constitutes 11% of the gas supplied to EU nations via pipelines, a stark decrease from approximately 40% in 2022. Simultaneously, Russian natural gas supplies in liquefied form (LNG) have increased significantly over the past three years.
The EU has ceased 90% of oil imports from Russia and banned Russian coal imports, but has not extended the embargo to Russian natural gas. Imports of this resource from Russia to Europe have risen by about 60% over the past three years, though they are at their lowest level since 2022, "FT" reminded.
Initially, the EU's "roadmap" was expected to be published as early as March, but its publication was delayed due to concerns that it would be obstructed by Hungary and Slovakia, which rely heavily on gas transported via pipelines from Russia to the EU. The government in Budapest has threatened to veto EU sanctions on Russian gas. Such a decision requires the unanimous agreement of all 27 EU member states.
The President of the European Commission, Ursula von der Leyen, informed the "FT" that the plan is slated for publication "within three to four weeks".
EU countries fear forcing companies to break contracts
Despite pressures from Brussels, EU countries are apprehensive about compelling companies to sever contracts with Russia for LNG supplies. They fear rising liquefied gas prices, with businesses facing escalating costs and geopolitical uncertainties.
The European Commission has empowered EU countries to block Russian and Belarusian operators from accessing port infrastructure or transmitting gas through EU pipelines. However, governments believe that this measure does not offer sufficient legal leverage to compel companies to terminate agreements.
The main ports receiving Russian LNG in the EU are located in France, Spain, and Belgium. The Russian liquefied gas plant Yamal LNG still holds agreements with some of Europe's leading energy companies, including the British company Shell and the Spanish firm Naturgy, "FT" highlighted.
