Page 8 - EurOil Week 03 2023

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Europe's gas pipeline
system.

If the conflict becomes frozen, without a One thing that is clear is that Russia will
peace agreement or internationally recognised never regain the market share it once enjoyed
borders, it is unlikely that the EU will be able to in Europe. The country’s image as a reliable sup-
reach a deal on renewed Russian gas flow, mean- plier – which for most of the past it lived up to
ing that only a few bloc members will continue – has now been irreparably tarnished. Buyers
receiving supplies after 2025. simply cannot trust Gazprom not to weaponise
If a peace deal is reached, then extra Rus- its supply in the future.
sian gas could return, but only if all arbitration Furthermore, regardless of future political
issues are resolved. A number of major European will, some of the replacement gas that Europe
buyers lost their supply in violation of contrac- is obtaining elsewhere will be permanent. Ger-
tual agreements, and they are considering legal many, for example, was previously the biggest
action. market in Europe for Russian gas. But Berlin is
Another aspect worth considering is whether now building several LNG terminals to obtain
Europe will insist that renewed gas flow is tied supply elsewhere, and German buyers are sign-
to Moscow’s commitment to contribute to ing contracts. German utility EnBW Energie
Ukraine’s reconstruction when peace is reached. Baden-Wuerttemberg signed a 20-year deal to
The Iraqi oil-for-food programme could serve as receive 2mn tonnes per year of US LNG from
a model for this. Europe would continue buying Venture Global last year, and other companies
Russian gas, with some of the revenue that Gaz- have signed a 15-year deal with QatarEnergy and
prom earns being sent to Ukraine. ConocoPhillips for 2mn tpy of Qatari LNG. ™

P8 www. NEWSBASE .com Week 03 20•January•2023