Page 13 - GLNG Week 03 2023

GLNG EUROPE GLNG

Russian gas will return to Europe,

Qatari energy minister predicts

TRADE RUSSIAN gas will eventually return to the EU, at 4.5bn cubic metres per month.
least according to Qatari Energy Minister Saad Moving forward, whether or not Russian
Sherida al-Kaabi, despite the bloc’s commitment gas flow will ramp up once more will depend of
to phase out those supplies in the coming years. course on events in Ukraine.
“The Europeans today are saying there’s no If the conflict becomes frozen, without a
way we’re going back” to Russian gas, al-Kaabi peace agreement or internationally recognised
said at the Atlantic Council Energy Forum in borders, it is unlikely that the EU will be able to
Abu Dhabi on January 16. “We’re all blessed to reach a deal on renewed Russian gas flow, mean-
have to be able to forget and to forgive. And I ing that only a few bloc members will continue
think things get mended with time … they learn receiving supplies after 2025.
from that situation and probably have a much If a peace deal is reached, then extra Rus-
bigger diversity [of energy supplies].” sian gas could return, but only if all arbitration
Russia has traditionally been Europe’s larg- issues are resolved. A number of major European
est supplier of oil and gas. In the months before buyers lost their supply in violation of contrac-
Moscow launched its invasion of Ukraine, Rus- tual agreements, and they are considering legal
sian state-owned Gazprom was supplying as action.
much as 40% of the continent’s gas. Another aspect worth considering is whether
Now the picture is radically different. The EU Europe will insist that renewed gas flow is tied
has replaced 80% of the gas it previously got from to Moscow’s commitment to contribute to
Russia, European Commission President Ursula Ukraine’s reconstruction when peace is reached.
von der Leyen said on January 17, adding that The Iraqi oil-for-food programme could serve as
EU sanctions would “plunge the Russian econ- a model for this. Europe would continue buying
omy into recession for decades.” Russian gas, with some of the revenue that Gaz-
Russia has been making drastic cuts to its prom earns being sent to Ukraine.
supply to Europe – initially withholding ship- One thing that is clear is that Russia will
ments to buyers that refused to pay in rubles in never regain the market share it once enjoyed in
May, and then by restricting flow via the Nord Europe. The country’s image as a reliable supplier
Stream 1 pipeline and reducing deliveries via – which for most of the past it lived up to – has
other routes. now been irreparably tarnished. Buyers simply
Some of that replacement gas has come from cannot trust Gazprom not to weaponise its sup-
Qatar, another leading supplier to the European ply in the future.
market. These extra volumes would have gone to Furthermore, regardless of future political
Asia, but soaring prices in Europe and the Chi- will, some of the replacement gas that Europe
nese economic slowdown have led to their being is obtaining elsewhere will be permanent. Ger-
diverted. many, for example, was previously the biggest
“Russian gas is going back, in my view, to market in Europe for Russian gas. But Berlin is
Europe,” al-Kaabi said. now building several LNG terminals to obtain
There is a lot of uncertainty about how much supply elsewhere, and German buyers are sign-
Russian gas could flow to Europe this year, with ing contracts. German utility EnBW Energie
the war in Ukraine seemingly far from over. Baden-Wuerttemberg signed a 20-year deal to
With the Nord Stream 1 pipeline now severed, receive 2mn tonnes per year of US LNG from
and sanctions making westward flow via the Venture Global last year, and other companies
Yamal-Europe pipeline no longer possible, Rus- have signed a 15-year deal with QatarEnergy and
sian deliveries are likely to range between 0.9 and ConocoPhillips for 2mn tpy of Qatari LNG.™

Week 03 19•January•2023 www. NEWSBASE .com P13