Page 10 - FSUOGM Week 05 2022

FSUOGM POLICY FSUOGM

EU, UK mull sanctions against

new Russian gas projects

RUSSIA THE EU and the UK are preparing potential gas production capacity would likely be a step
sanctions to impose against new Russian gas up from anything we’ve seen before,” James
The aim is to avoid any projects in the event that the Kremlin invades Waddell at Energy Aspects told the newspa-
short-term disruption in Ukraine, the Financial Times (FT) reported on per. “It would hurt Russia by going after a sec-
gas supply to Europe. January 28. tor they really care about, but it wouldn’t be
Russia has amassed a force of more than cutting off our nose to spite your face in the
100,000 troops at the Ukrainian border, and way trying to restrict exports would be in the
European and US officials have warned that an short term.”
invasion may be imminent. Russia’s oil and gas Analysts at Moscow-based brokerage BCS
industry is already subject to various sanctions Global Markets assume that potential new sanc-
that restrict access to financing and participa- tions will not apply to Gazprom’s Baltic LNG
tion by Western companies in unconventional, joint venture and Novatek’s Arctic LNG-2, the
deepwater and Arctic projects, but Europe has latter of which involves France’s TotalEner-
threatened additional action in the event of a gies, as final investment decisions (FIDs) have
military incursion. already been taken on those developments. But
The FT did not disclose much detail on which the measures could be introduced against other
projects would be targeted, but said the aim was Novatek projects yet to be sanctioned, including
to avoid any short-term disruption in gas sup- Arctic LNG-1 and Arctic LNG-2.
plies, at a time when gas prices in Europe are at Other potential LNG projects including Ros-
record heights and there is a risk of shortages neft’s Vostok Oil venture and the YATEK LNG
later this winter. project could also be affected, the brokerage
“Europe looking to hit long-term Russian said.™

Russia open to further US security

talks but not hopeful

RUSSIA RUSSIA has said it is prepared to continue talks at the Ukrainian border, and Ukraine and some
with the US over the European security situa- of its Western allies have signalled they believe
Russia insists that tion, but is not hopeful about their prospects, a war is imminent. Even so, the Russian foreign
an invasion is not its the Kremlin said on January 27. ministry indicated that an invasion of Ukraine
intention. The comment by Kremlin spokesman was not Russia’s intention.
Dmitry Peskov comes after the US and Nato “We have already repeatedly stated that our
rejected Moscow’s demand for a veto on country does not intend to attack anyone,” a
Ukraine ever joining the military alliance. The ministry spokesman said. “We consider even
Russian side has issued a number of other, less the thought of a war between our people to be
realistic demands, such as the withdrawal of unacceptable.”
Nato troops from other countries in the eastern Tensions between Russia and the West, pri-
bloc such as Poland and the Baltic States. But it marily the US, over events in Ukraine, have
has signalled it may back down in the standoff exerted upward pressure on European gas prices,
if it receives a commitment that Ukraine will because of a potential cut-off this winter of Rus-
never join Nato. sian gas transit to Europe. The EU and the US are
“There isn’t much reason to be optimis- in talks at arranging additional gas for Europe
tic,” Peskov said, following the answer Russia from elsewhere in the event of a disruption in
received from the West, as “there is no positive transits. But it is unclear where this gas could
response in this document on the main issue,” come from, given the current tightness of the
referring to Ukraine’s potential Nato member- global gas market. Gas futures spiked on Jan-
ship. But he added that Moscow needed time to uary 24, with the February delivery contract at
analyse the US document and would not “rush the Dutch TTF gas hub climbing by 24%. It had
into assessments.” mostly held this ground as of the end of trading
Russia has amassed a force of 100,000 troops on January 27. ™

P10 www. NEWSBASE .com Week 05 02•February•2022