Bypassed the US: how Russian gas conquers Europe
Aug 13, 2019

Bypassed the US: how Russian gas conquers Europe

Russia bypassed the United States and became the second after Qatar supplier of liquefied gas to the European market. Experts believe that our trany there is every chance for leadership in this direction. However, the success of Russian LNG in the EU may be hindered by the launch of Nord stream 2, since pipe gas is more competitive in terms of price parameters.

Russia on all fronts restrains the us onslaught on the gas market in Europe. American suppliers of liquefied natural gas (LNG) bypassed not only Gazprom with its cheaper pipe gas, but also Russian LNG suppliers. In terms of the supply of this type of fuel to the European market, Russia has been surpassing the United States for several months, second only to the long-standing and traditional partner of the EU — Qatar.The fact that Russia firmly holds the second place among LNG suppliers to Europe, on August 12, said the first Deputy head of the Russian government apparatus Sergei Prikhodko."Russia is the largest and most reliable supplier of natural gas to Europe. Last year, the supply of Russian pipeline gas to the European market amounted to a record 201.9 billion cubic meters. Taking into account the real situation and the market situation, it is predicted that in 2019 they will be close to this indicator," Prikhodko said, adding that "Russia is also among the leaders in LNG supplies to the EU countries, taking second place after Qatar."For Russian LNG as a whole, there are good prospects for further growth in its share in the European market, Ilya Zharsky, managing partner of the expert group Veta, is sure. "First of all, this is due to the fact that from the place of production to consumers, gas does not need to swim across the ocean — logistics costs in this regard are greatly reduced," Zharsky notes. It also plays into the hands of suppliers that small LNG plants have begun to appear in the Baltic region, which can regularly meet demand in the EU and offer a competitive price at the expense of the same short transport shoulder, he adds.It is interesting that the buyer of Russian liquefied gas was even a negative attitude towards our country Lithuania: the economic supply of LNG from the port of Vysotsk of the Leningrad region to Klaipeda is much more expedient than the transfer of a tanker from the United States.Formally, due to trading operations, this gas may not even appear to be Russian, which allows the authorities to hide the fact of purchasing hydrocarbons from Russia and continue to pretend that they are moving to "gas independence" from Moscow.Experts have repeatedly stressed that the LNG market has already become truly global. And it is because of this that this sector is much less politicized than the supply of the same pipeline gas. This is confirmed at least by the fact that one of the first batches of liquefied gas from the Russian Yamal-LNG project in the year before last, after several resales, went to the United States, where the need for fuel increased sharply due to cold weather.

Your CNG representatives of the United States and is called the "molecules of American freedom," although methods for their promotion to world markets enough to tally with the principles of democracy and liberalism, neither the President, Donald trump nor members of his Cabinet, nor the congressmen do not hesitate to openly protectionist measures in the implementation of its hydrocarbons.For example, the White house has been calling on European allies to switch to LNG from the US instead of pipe gas from Russia for several years: up to the introduction of new sanctions against Russian pipeline projects. Last summer, the promise of the former head of the European Commission Jean-Claude Juncker to build more capacity in the EU for the acceptance of American LNG was the key to ending the almost begun trade war between the Old and New world.American companies with the support of the authorities led a rather aggressive offensive on the traditionally strong positions of Gazprom in the European market, trying to push Russia, but the Yamal projects became a new gas front, which due to a shorter transport arm turned into new competitors of the US in the European gas market.In the context of the slowdown of the world economy — and in particular the European one — the favorable price offer will literally solve many things in favor of Russian producers, States Zharsky.According to the annual report of the International Association of liquefied gas importers (GIIGNL), LNG supplies from Russia to Europe last year almost doubled the volume of imports of American energy. Net LNG imports from Russia to the EU in 2018 amounted to 4.4 million tons, LNG supplies from the US to Europe — 2.7 million tons."In the future, the planned gas projects in Russia, can seriously add to the total volume of gas production in Russia, which will eventually allow us to take 20-22% of the European LNG market," — says the head of the analytical Department of AMarkets Artem Deev.Earlier, Russian energy Minister Alexander Novak in an interview "Газете.Ru" I noted that Russia plans to occupy up to 20% of the global LNG market.Nevertheless, it is premature to call Washington an outsourcer in this direction: according to the report of the European Commission, in 2019 the US became the third largest supplier of LNG to the EU, in the first half of the year the United States accounted for 12.4% of the total EU imports of liquefied natural gas, while last year — only 5%.At the same time, experts note that the promotion of Russian LNG to the EU may slow down Russian pipeline projects, in particular Nord stream 2 and Turkish stream."Pipe gas projects reduce the need to buy more expensive LNG. When the Nord stream — 2 and Turkish stream lines are launched, Europe's demand for LNG will be slightly reduced," Deev predicts.Gas on the "Nord stream — 2" is planned to be launched in the EU in January 2020. The design capacity of the pipeline is over 55 billion cubic meters per year.

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