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Amid ongoing tension between NATO and Russia around Ukraine, the head of the treaty organization Jens Stoltenberg has expressed concern about Europe's dependence on Russian gas.
"We are concerned about the energy situation in Europe because it demonstrates the vulnerability of being too dependent on one supplier of natural gas and that's the reason why NATO allies agree that we need to work and focus on diversification of supplies," Stoltenberg said on Sunday, as quoted by Reuters.
Russia's Gazprom supplies about a third of Europe's gas, with Western Europe and Turkey accounting for 78 percent of the state major's exports in 2020 and Central Europe accounting for 22 percent, according to Gazprom data.
In a bid to reduce this dependence—and get its European partners to agree to tougher sanctions on Russia—Washington scheduled talks with Qatar on alternative gas supplies. The talks are taking place today, but chances that Qatar can replace Russia as gas supplier are slim, at best. Per a recent Bloomberg report, the emirate is already pumping at capacity, and most of its gas is sold via long-term contracts in Asia.
U.S. natural gas is, alas, not really an option. Like Qatari gas, there are other buyers ahead of Europe in the queue, and the Europeans themselves are not really willing to pay the premium for U.S. LNG. There is also the issue of import capacity, which is still rather limited in the Old World.
Even Germany, the biggest buyer of Russian gas in Europe, does not have an LNG import terminal. Utility major Uniper planned to build one in Wilhelmshaven but in 2022 abandoned these plans in favor of a green hydrogen hub.
Meanwhile, the Ukrainian situation is at the stage of a standoff, with both sides unwilling to make concessions to each other's demands.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.