• 3 minutes Biden Seeks $2 Trillion Clean Energy And Infrastructure Spending Boost
  • 5 minutes While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 8 minutes Gazprom fails to exempt Nord Stream-2 from EU market rules
  • 7 hours China wields coronavirus to nationalize American-owned carmaker
  • 3 hours Open letter from Politico about US-russian relations
  • 25 mins Joe Biden the "Archie Bunker" of the left selects Kamala Harris for VP . . . . . . Does she help the campaign ?
  • 23 hours Renewables Overtake Coal, But Lag Far Behind Oil And Natural Gas
  • 2 days Trumpist lies about coronavirus too bad for Facebook - BANNED!
  • 18 hours US will pay for companies to bring supply chains home from China: Kudlow - COVID-19 has highlighted the problem of relying too heavily on one country for production
  • 2 days China's impending economic meltdown
  • 3 days Why Oil could hit $100
  • 8 hours Trump is turning USA into a 3rd world dictatorship
  • 3 days Pompeo upsets China; oil & gas prices to fall
  • 3 days Brent above $45. Holding breath for $50??
  • 2 days Rational analysis of CV19 from Harvard Medical School
  • 2 days The Truth about Chinese and Indian Engineering
  • 2 days What the heroin industry can teach us about solar power (BBC)
The Permian Could See Record Gas Production In 2021

The Permian Could See Record Gas Production In 2021

The Permian basin could return…

Cheap Natural Gas To Remain Fuel Of Choice For Decades To Come

Cheap Natural Gas To Remain Fuel Of Choice For Decades To Come

Researchers think that cheap natural…

Why Natural Gas Prices Just Exploded

Why Natural Gas Prices Just Exploded

Natural gas prices were soaring…

Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Premium Content

North-American LNG Could Weaken Russia’s Grip On Europe

December 2015 could mark the dawn of a new era – Cheniere Energy is expected to start up the first train of its Sabine Pass LNG export facility, turning the U.S. into a global player in the LNG export market.

But Cheniere Energy has even more ambitious plans. According to Reuters, the Houston-based company has plans to supply Eastern Europe with LNG in just a few years, including a floating regasification terminal off the coast of Croatia. That would allow American-produced natural gas to reach Central and Eastern Europe.

Cheniere is considering floating regasification because an onshore LNG import facility would be expensive and “faces too many roadblocks to succeed,” according to Reuters. Related: Midweek Sector Update: China’s Stock Market Crash Looming Large Over Oil Prices

“LNG would allow these countries to participate in the fully global gas market,” a source told Reuters. “Cheniere's goal is not to squeeze out the Russians but to allow for a good mix on the market.”

That may not be Cheniere’s goal, but it could be a practical outcome of greater American LNG in Europe. Russia supplies Europe for about one-third of its natural gas imports, a share that European policymakers are looking to shrink, especially after the onset of the Ukraine crisis last year. Related: Has The E&P Industry Lost Touch With Reality?

“Clearly there is a business dimension here, and there is a political dimension,” another Reuter’s source said. “Cheniere's role is part of a wider Russian-American struggle.”

Russia has lost quite a bit of leverage in Europe in the past few years. The surge in shale gas production has freed up LNG from other sources around the world, rerouting shipments to Europe that might have otherwise gone to the United States. As a result, LNG prices for Europe are more accessible, offering a viable alternative to imported Russian gas. The collapse in oil prices has also undercut the price of LNG. Related: Top Factors Undermining Any Oil Price Recovery

Moreover, the antitrust case that the EU is pursuing against Gazprom could yet wring concessions out of the Russian gas giant. EU regulators allege that Gazprom has historically played a divide-and-conquer game in Eastern Europe using gas exports, charging different countries different prices depending on their willingness to cooperate with Moscow over other unrelated political matters.

But global LNG supplies are set to explode over the next few years, and not just from American shores. That could keep a lid on LNG prices for the short- to medium-term, undermining Russia’s ability to use gas as a political tool.

By Charles Kennedy Of Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News