As U.S. Exports Gas to Europe, Russia Digs In

21 Aug 2017   exports, LNG

U.S. attempts to export natural gas into Europe’s energy market are facing stiff resistance from the region’s dominant player: Russia.  A tanker is scheduled to arrive in Lithuania this week carrying the first shipment of U.S. liquefied natural gas to a former Soviet republic. It follows a handful of other shipments of U.S. gas to Europe and comes in the wake of widespread predictions that American exports would help break Russia’s dominance of the European energy market.  But Russia is moving quickly to contain the new competition to its largest energy market. Its state-run energy companies are lowering prices, changing sales methods and developing their own LNG facilities. Moscow is also pushing ahead with a pipeline opposed by both Washington and Brussels.

While European governments are eager to reduce Russia’s chokehold, and its resulting political leverage, the region’s consumers are looking beyond politics for the lowest prices. That favors Russia. Last year, Russia exported record levels of gas to Europe, helped by lower prices and falling domestic production elsewhere in Europe.  “We are tracking the situation on the global gas market and the growth of U.S. shale gas production,” Russia’s energy minister, Alexander Novak, said in an interview last month. “Recently we have allocated a lot of efforts to boost our presence on the LNG market.”

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