Spain's Naturgy sees 'opportunities' to buy gas from Yamal LNG Project in Jan

MOSCOW. Oct 30 (Interfax) - Spain's Naturgy, which has a long-term contract to purchase 2.5 million tonnes of liquefied gas from the Yamal LNG project, sees "opportunities" to buy this gas starting in January 2027, given current and potential market developments, an executive of the Spanish company said during a conference call.

Naturgy will certainly never do anything illegal, but given the events of recent months and market forecasts, it sees opportunities to buy those volumes, the executive said.

The situation with Yamal LNG has changed since the first EU restrictions were adopted in October 2025, particularly due to the issue of supply security, which, according to the authorities, is just as important as the other two parts of the "trilemma."

And it's clearly very difficult to remove from the market such large volumes as Yamal LNG - and this applies not only to Naturgy's gas but also to that of other European companies - without potentially affecting energy security, the company said.

As reported, the European Union's ban on the import of Russian LNG under long-term contracts goes into effect on January 1, 2027. The ban was imposed both under sanctions and under a European directive.

Ahead of the discussion of the 21st European sanctions package in July this year, TotalEnergies CEO Patrick Pouyanne said he hoped the European Commission would take the interests of European companies into consideration when deciding on sanctions against Russian LNG. The sanctions adopted in October 2025 prohibited European companies from transferring Russian LNG to third countries.

As a result, the EU introduced several exemptions from the sanctions. European operators are allowed to transfer Russian LNG to third countries and, where applicable, purchase it, but both the transfer and the purchase must be carried out under long-term contracts concluded before February 24, 2022 and not amended since then. This exemption is effectively indefinite: it will remain in effect until July 25, 2027 and for subsequent one-year periods, unless the European Commission decides otherwise following an annual review based on a regular assessment. By June 25, 2027, and every 12 months thereafter, the EC must submit to the Council an assessment of the economic impact on Russia of the measures provided for in this clause. This assessment may be submitted earlier if the Commission deems it justified.

TotalEnergies has a long-term contract to purchase 4 million tonnes of LNG per year from Yamal LNG. The contract price is pegged to the price of Brent crude. Pouyanne said on October 29 that TotalEnergies estimates it could take "between 3 and 4 million tonnes, say 3 million tonnes" from Yamal LNG, but there was no clarity yet.

When the Yamal LNG plant, with capacity of 16.5 million tonnes, was built, it was said that about 95% of its gas had been contracted under long-term contracts in Asia. The company later launched another train with capacity of 900,000 tonnes per year using a different technology. In addition, thanks to subzero temperatures, the plant is operating above capacity, producing about 20 million-22 million tonnes of LNG per year. The additional gas is sold under spot and medium-term contracts. The gas from the project is contracted by its shareholders and other companies that, having LNG from throughout the world in their portfolios, can swap it with Yamal gas and ship to the most lucrative markets.

TotalEnergies bought the largest amount from Yamal LNG, 4 million tonnes per year, while CNPC bought 3 million tonnes. Russian gas giant Gazprom bought 2.9 million tonnes per year for delivery to the Indian market (since the nationalization of Gazprom's German subsidiary, this volume has been managed by Germany's SEFE); Spain's Naturgy bought 2.5 million tonnes; and Novatek bought only 2.4 million tonnes. Of its 2.38 million tonnes, Novatek Gas & Power contracted 1 million tonnes to France's Engie, 0.9 million tonnes to Shell (SPB: RDS.A) International Trading Middle East and 0.5 million tonnes to trader Gunvor.

Yamal LNG is a joint venture between Russia's Novatek, with 50.1%, and France's TotalEnergies and China's CNPC with 20% each. It was reported that spot volumes from Yamal LNGwere distributed among project shareholders on a pro-rata basis.

Germany's Ministry of Economic Affairs and Energy said in June that SEFE must terminate its gas import deal with Russia. One way to terminate the current contract for Russian LNG supplies would be to declare force majeure.

A clause allowing companies to avoid fulfilling contractual obligations could go into effect given the European Union's latest sanctions against Russia and the EU's desire to phase out energy supplies from Russia, the ministry said. However, the cost of terminating the contract is estimated at approximately 10 billion euros or $11.6 billion. The company said it would assess the impact of the new sanctions on the contract but it has not yet taken any action.

The ministry said the import agreement, which is for 2.9 million tonnes per year, was valid until 2040 with no possibility to terminate it. Germany has now got the privatization of SEFE underway.