One of the world’s top liquefied natural gas exporters, Australia, says it is ready to ship LNG cargoes to Europe to “support its friends and allies,” as the U.S. is looking to raise alternative gas supply in case a Russian invasion of Ukraine disrupts Russia’s gas supply to Europe.
“Australia, of course, stands ready to support its friends and allies. We have a well-developed gas resource. We have the capacity to deliver not only domestically but right across the world,” Australia’s Resources and Water Minister Keith Pitt said at a press conference on Thursday.
“We will, of course, continue to meet our contract demands for those arrangements that are already in place and deliver the domestic supply that is necessary for industry in this country and, of course, look for spot cargo opportunities elsewhere,” Pitt said.
As of Thursday, Australia had not received any formal requests to deliver gas to any other locations, the minister added, noting that “Australia does stand ready to deliver where necessary.”
Australia is one of the largest LNG exporters in the world, so it could help alleviate a shortage of gas in Europe in case of a Russia-Ukraine conflict.
The U.S. Administration is in talks with energy companies and major gas-producing countries globally about the potential for a large supply of natural gas to Europe in case Russian deliveries are interrupted.
Russia, which supplies over one-third of the natural gas that Europe consumes, could weaponize gas deliveries if the West imposes sanctions on Moscow over a possible invasion of Ukraine, European allies of the United States fear. In addition, in the event of military action and subsequent energy sanctions against Russia, Europe would be the first and hardest hit, including in its gas supply from Russian gas monopoly Gazprom, analysts say.
The White House is dealing with logistical challenges in its efforts to secure alternative natural gas supply to Europe, Press Secretary Jen Psaki said earlier this week.
By Tsvetana Paraskova for Oilprice.com
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This is a physical impossibility because it will deprive the Asia-Pacific region which is the world’s largest and most lucrative gas market of its needs and this will send gas and LNG prices to the stratosphere.
Therefore, replacing Russian gas supplies is pure hype.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London