30.11.23 / #LNG #embargo #Arctic_LNG-2 #climateaction NACP international sponsors of war / Press Release

Ukraine’s NACP lists Belgian gas company Fluxys as an international sponsor of war

Kyiv, Nov 30, 2023, for immediate release

The National Agency of Ukraine for Corruption Prevention (NACP) has made a significant addition to its list of international sponsors of war, including Belgium's independent gas system operator, Fluxys. The move comes in response to Fluxys's divergence from the UN Guiding Principles on Business and Human Rights and its consistent facilitation of climate-damaging Russian liquefied natural gas (LNG) exports—a financial lifeline empowering the Russian invasion of Ukraine.

“Despite the ongoing full-scale Russian invasion, Belgian independent gas infrastructure operator Fluxys continues to provide Yamal LNG, a subsidiary of Novatek, with essential services of LNG storage and transshipment at its Zeebrugge terminal. These services enable exports of Russian LNG to the world markets and provide extra revenues for Novatek and tax incomes to the Kremlin regime, which commits countless war crimes in Ukraine. Provided with facts by Ukrainian and Belgian civil society organizations, we found sufficient evidence to list Fluxys as the international sponsor of war”, - said Agia Zagrebelska, head of the direction of minimization of corruption risks in the sanctions policy of the NACP.

Belgian independent gas system operator Fluxys, provides LNG storage and transshipment capacity to "Yamal LNG," a joint venture predominantly owned by Novatek, a Russian gas entity directly linked to funding military aggression and war atrocities in Ukraine. Detailed analysis by the International Institute for Energy Economics and Financial Analysis (IEEFA) in 2022 revealed Fluxys and its stakeholders profiting from facilitating Russian LNG exports to markets in Asia, South America, and the Middle East—exacerbating the European energy crisis and amplifying profit margins for Novatek.

“The reputational risks of being listed as sponsors of war and potential credit rating impairments do not come alone for Fluxys. By continuing its engagement in operations with Russian LNG, Fluxys can be facing the risk of being subject to secondary sanctions by the US, especially considering that Novatek is reported to be directly involved in the Russian war of aggression with investigations showing that the company's security guards were used to form special military units that engaged in hostilities in Ukraine”, - said Svitlana Romanko, founder and director of Razom We Stand.

Amidst the unprovoked war, numerous companies have severed business ties with Russian counterparts post-24th February 2022. However, Fluxys continued its cooperation with Yaman LNG and Novatek throughout 2022 and into 2023. Expert projections indicate that Russia could amass up to 800 million euros in tax revenues from LNG transshipments in Zeebrugge in 2023, with just 7% of that gas destined for EU markets. Under the long-term contract inked in 2015—following Russia's annexation of Crimea and the onset of the Donbas war—Fluxys receives 50 million euros annually for this service.

Novatek, owned by Russian oligarchs Leonid Michelson and Gennady Timchenko, serves as the primary supplier of Russian liquefied natural gas to global markets. Michelson and Tymchenko, closely linked to Vladimir Putin's inner circle, seized shares in international companies involved in Russian oil and gas projects with the regime's assistance. Notably, Novatek faced US sanctions in July 2014 and Canadian sanctions in 2016, including sanctions on several of its subsidiaries. Recently, on November 2, 2023, US sanctions were imposed on Artcil LNG 2, a Novatek project aimed at doubling export capacity.

In October, Ukrainian advocacy group Razom We Stand, on behalf of 23 Ukrainian NGOs, appealed with an open letter to the Belgian Federal Government, urging them to take the lead in introducing a complete ban on Russian LNG transshipments in all EU harbours, including the Zeebrugge LNG terminal operated by Fluxys. Such bans have already been enacted by the Netherlands and the UK.

Fluxys's primary shareholders include Belgian Municipalities (77.41%) and the Federal Government (3.44%). Both entities have pledged allegiance to maintaining global temperature rise below 1.5℃ through the Covenant of Mayors and the Paris Agreement, respectively. They also affirm high regard for International Humanitarian Law, prohibiting deliberate attacks on civilians or critical civilian infrastructure—an ethos at odds with continued cooperation with Novatek.

Press contacts:

Paraic Walker, International Communications Specialist, Razom We Stand

[email protected]