Russia Outmaneuvers U.S. Lng

From Oilprice, Nov 28:

For years, boosters of U.S. LNG select trumpeted the fact that gas exports from the Gulf of United Mexican States could pause Russia’s pocket on the European disclose energy market. That has yet to live on the case, as well as inward fact, Russian Federation has managed to response amongst diverse strategies to hold its marketplace portion on the continent.

“The USA is non only exporting energy, we’re exporting freedom,” U.S. Secretary of Energy Rick Perry said inward early on 2018. “We’re exporting to our allies inward Europe the chance to genuinely select a alternative of where create you lot purchase your disclose energy from. That’s freedom. And that sort of liberty is priceless…There’s no strings attached when you lot purchase American [liquid natural gas]. So that’s world-changing.”

That comment from Perry crystalizes conventional wisdom inward Washington. Europe relies on Russian Federation for almost a 3rd of its gas needs. For years, Russia’s Gazprom was able to bind diverse European countries upwardly into stiff contracts amongst fixed prices, oft linked to higher unsmooth crude prices. Worse, Russian Federation tended to negotiate bilateral deals, as well as would offering preferential terms to friendly countries as well as higher prices to others. These practices raised the ire of the European Commission’s antitrust regulator, which forced Gazprom to dial dorsum on such strong-arm tactics.

But amongst few alternatives, at that spot was piffling prospect of key alter – Europe would yet involve Russian gas for the long haul.

The most promising alternative came from U.S. LNG. Cheap shale gas sparked a moving ridge of investment before this decade. Cheniere Energy brought its Sabine Pass LNG facility online nearly 3 years ago, as well as several to a greater extent than terminals are inward the works.

The mere threat of American LNG arriving inward Europe arguably weakened Gazprom’s hand. Lithuania, for instance, forced Gazprom to concur to pricing concessions when it managed to convey inward a floating LNG import terminal, opening upwardly the door to imported gas from places other than Russia.

Last year, the get-go American LNG cargo arrived inward Lithuania. “U.S. gas imports to Republic of Lithuania as well as other European countries is a game changer inward the European gas market. This is an chance for Europe to destination its addiction to Russian gas as well as ensure a secure, competitive as well as diversified supply,” Lithuanian President Dalia Grybauskait? wrote to Foreign Affairs at the time.

However, things select non changed equally much equally unopen to had hoped. Russia’s marketplace portion inward Europe is piffling changed. This has occurred for several reasons. First, really few U.S. LNG cargos select really arrived inward Europe. Second, Russian Federation is non sitting past times watching its set erode. Instead, it has expanded its ain operate of LNG as well as it has too redoubled its efforts at locking European buyers into gas via pipelines....MORE