LNG Supplies From The United States

In 2015 several of the Eastern European countries will face a dilemma whether they should prolong their long-term contracts with Russia’s Gazprom, Financial Times reports.

Ongoing crisis in Ukraine has provoked haphazard statements from the Obama’s administration regarding their intentions to open up some of the vast reserves of the natural gas. In case this will happen, Eastern European countries will demand lower prices from Gazprom in order to continue long-term collaborations. For example, government officials from Hungary, Lithuania and Estonia have recently confirmed that they are ready to use alternative gas suppliers, in case Gazprom will dismiss their bargaining requests.

However, at this point ambitions of these countries have not been matched by the certain commitment from the United States to become a major supplier of the shale gas to the European continent. Hence, there is an obvious pressure upon Hungary, Lithuania, Estonia and several other countries because currently they are almost hundred percent dependent on the Russian gas. According to the American legislation system, exporters of the natural gas are not able to have a free trade with any countries that US has not signed a fixed trade deal. Based on the current rules, exporters need a government permit in order to supply LNG to the European continent.

Further more, non of the European countries will be able to enjoy benefits of the American shale gas any time in the nearest future – first export terminal on the territory of the United Stated will not be opened until 2015. Even though US energy department has already issued several permits, terminals are still being built. Hungarian officials are concerned about their growing dependence on the Russian gas supplies. Subsequently, they are looking for some diversity among the potential suppliers.

Anita Orban, ambassador-at-large for the energy security, has said during the hearing on Tuesday: “The only way to limit the monopoly supplier’s ability to exact damage and sow discord through the deployment of the price weapon is to establish alternative supply routes.” Central European countries are building alternative pipelines throughout the continent to secure possible variation of connections, however, they admit that they still 70-100% reply on the Russian gas supply.

by Ekaterina Egorova

Photo: nyugatijelen.hu

Source: http://www.ft.com/home/europe