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U.S. Seeks Help From Key Asian Importers To Send Gas To Europe

The United States and Europe are talking to major LNG importers in Asia­—including Japan, South Korea, India, and even China—to potentially send some of their gas supply to Europe in case the Russia-Ukraine crisis escalates into a conflict, Bloomberg reported on Wednesday, citing sources with knowledge of the discussions.  

The contacts with China have been limited, two of the sources told Bloomberg. The Biden Administration has approached officials from Japan, South Korea, and India about the possibility to divert some natural gas supply to Europe, Bloomberg’s sources said.

The U.S. Administration is also 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.

Major LNG exporter Australia said last week it was ready to ship LNG cargoes to Europe to “support its friends and allies,” while Qatar has signaled willingness to divert some cargoes if the European Union restricts the resale of gas cargoes outside the EU.

International energy companies approached by the U.S. told officials that natural gas supplies globally were tight, and there wasn’t too much gas available to replace Russia’s large amount of supply, industry sources told Reuters last month.  

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 will be hit the first and the most, including in its gas supply from Russian gas monopoly Gazprom, analysts say. 

Russian natural gas supply to Europe cannot be replaced with LNG sourced from other top gas producers, analysts say.

“You would have to divert half of the LNG that Asia consumes in order to replace Gazprom PJSC. And what would that mean? That would mean massive energy shortages all across Asia, you would export Europe’s energy crisis to Asia,” BCS Global Markets Senior Analyst Ron Smith told Bloomberg on Wednesday.


By Charles Kennedy for Oilprice.com

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  • George Doolittle on February 02 2022 said:
    Poor me for thinking someone in Massachusetts might stand up for Massachusetts.
  • Mamdouh Salameh on February 02 2022 said:
    It is a waste of time and efforts. The unvarnished truth is that the entire LNG exports from the United States, Qatar and Australia could hardly replace the almost 200 billion cubic metres (bcm) piped by Russia to the EU. Moreover, the bulk of Qatari, Australian and American LNG exports is already contracted for in the Asia-Pacific region. To this could also be added that the global LNG market is currently very tight with rising demand in Asia particularly China and that Russian piped gas is far cheaper than LNG.

    As long as EU sanctions against Russia in the event that the Ukraine crisis escalates into a military conflict don’t include gas supplies and Nord Stream 2 gas pipeline, Russia might not cut gas supplies to the EU.

    Germany which depends on Russian gas and oil for 60% of its needs will object to the EU imposing sanctions on Russian gas supplies and Nord Stream 2. Moreover, the EU might think twice before embarking into that option because they will shiver in mid-winter. The extra electricity and energy bills for having to import LNG will be very taxing indeed.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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