“N.O payment, no On March 29, a Russian government spokesman roared. Outraged by the West’s economic sanctions, President Vladimir Putin has ordered ministers that “unfriendly” countries must start paying for Russian natural gas in rubles. Yes6 countries have rejected. Gas prices have risen sharply in the wake of Mr Putin’s decision to cut off calls. On March 30, Germany took the first step towards gas rationing and began to prepare for the worst At the end of the day, however, the German government said it had received assurances that European companies would not have to pay rubles.
Even if a embargo is avoided, the recent conflict certainly strengthens Europe’s desire to ease Mr Putin’s hold on the economy. The I Russia has promised to reduce its natural gas imports, which accounted for about 40% of last year’s energy costs, and two-thirds by the end of 2022. The head of the European Commission, Ursula von der Leyen, dreamed that the I In a few years Russian imports can completely “get rid”. Can America, one of the world’s largest exporters of natural gas, help fill the gap?
When the Trump administration tried to persuade European officials to reduce their reliance on Russian power by implementing a policy of importing more liquefied natural gas.LNG) The proposal from America — called the “molecule of freedom” উপ was ridiculed. Yet President Joe Biden sees himself as doing something similar to his predecessor. On March 25, he and Mrs. von der Lane announced a “groundbreaking” plan IDependent on Russian gas. It called for American help to secure an additional 15 billion cubic meters LNG For Europe this year (equivalent to about one tenth of the total European imports of Russian gas in 2021). It promises “extra confirmation I Market demand for 50 billion cubic meters of fuel per year from America by 2030.
Industry insiders have welcomed the ambitious plan with skepticism. One reason is that American gas companies face serious infrastructural constraints. The share of American exports to Europe increased from 4% in 2017 to about 30% last year (equivalent to 22 billion cubic meters), as prices on the continent rose. “Almost 100% of America’s liquefaction capacity has already been used,” says Ristad, a research firm, which means “no excess.” LNG Exports will be “short-term. Jack Fusco, the boss of Chenier, a major American power company, has confirmed that his firm has been” maxed out. ” By
There are also questions about whether I There is an infrastructure to deal with imports. Accepting its cargo LNG And to convert them into usable natural gas requires great facilities for regasification. Europe has additional powers, but most of them are on the coasts of western countries, such as Spain and France. Poor interconnection means they are not very effective in getting imports to the eastern part. I, Where a ban would hurt the most. Germany, which is not LNG The terminal has promised to build two, but it will take several years. Some European countries are talking about floating acquisitions LNG Terminals that can be set up more quickly, but have a serious global deficit.
Look at the long term, though, and the new approach to natural gas shows more promise. Because of that I It seems ready to reduce its confusing hostility to the long-term gas deal, which it discouraged as part of its efforts to expand the spot market for gas. The aim was to boost competition, but, as the price of rocket gas rose last winter, it left Europe badly exposed to the pressure of supply. As a top American LNG Exporters explained that Europe focused on spot market expansion when it should have set “excellent” long-term prices instead.
The commission now says it will encourage long-term agreements “to support final investment decisions on both issues. LNG Export and import infrastructure ”. It will give investors the confidence to spend the billions they need on American export facilities, boosting transatlantic trade. Wood Mackenzie’s Giles Farr, a consultant, estimates that the infrastructure needed to achieve the 50 billion cubic meter liquefaction capacity in the United States will cost approximately $ 25 billion, not including upstream investment and supply-chain inflation. Ristad estimates the cost of meeting Europe’s surplus could be as high as বিল 35 billion.
In the long run, diversification from Russia may be possible. But it rarely helps Mr. Putin’s short-term problems with aggression. A logical calculus suggests that he should be reluctant to turn off the call, considering that he gets handsome from the high price. Energy Intelligence, an industry publisher, estimates that Gazprom made $ 20.5bn from European gas sales in the first two months of the year, which was generated from across Europe by 2020. Irregular dictator. 3
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This article was published in the print edition of the section on finance and economics under the headline “A little help from a friend”