Can American gas to compete with Russian in Europe?

On Tuesday, Petro Poroshenko, are expected to meet in Washington with Donald trump. Visit to the United States was adopted immediately after his arrival in Kiev, the former mayor of new York and associate of Donald trump, Rudolph Giuliani, may 7 (he was brought to Kiev ahead for the trip). Global theme two: Minsk and liquefied natural gas, which the US wants to sell to Ukraine, writes a site «News of Ukraine». Supposedly good for a meeting was received after the consent of Poroshenko on the gas issue. «The US is preparing to build a LNG-terminal in Poland, and, according to the plans, this gas will replace Russian» — leads edition of the words of the Ukrainian political analyst Alexei Yakubina.

Last week in Poland came from America tanker «Clean ocean» with the first cargo of liquefied natural gas (LNG). Happened, according to the Prime Minister Beata Szydlo, the historical event . Joy Szydlo clear – Poland, she said, has taken another step towards independence from Russian gas. A little earlier the liquefied gas came from America and Holland. He put the only exporter of gas to the US company Cheniere Energy. However, in the Netherlands, about any «historical event» is not mentioned. For the Dutch it is a normal working time.

The Americans again proved that they know how to act quickly. They took advantage of a favourable situation – growing demand for liquefied natural gas, especially in Europe, as well as the growing production of shale gas in America and announced his bid to become serious players in the international gas market. Europe attracts them like a magnet, for two reasons. First, in the Old world stable demand for natural gas, and secondly, on the continent, especially in the East and in the centre there was a favorable political situation: a number of European countries very much want to buy gas not only from Russia. In Brussels believe that Russia’s gas giant Gazprom, which meets a third of the needs of the continent in Gaza, holds a dominant position in the European gas market and, thus, endangers the energy security of the United Europe.

Poland is one of the countries most strongly dissatisfied with the dependence on «Gazprom». In 2016 the share of Russian gas imports PGNiG amounted to 89%. Warsaw has repeatedly said it wants to free itself from this dependence. Poland – the most vocal opponent of the construction of the pipeline «Nord stream – 2». It is not surprising that Warsaw is so hard looking for new gas suppliers. Therefore, the liquefied gas of «big brother», America, the poles met as some kind of miracle that will save them all the troubles and woes.

«Today, Poland can say that it became a sovereign country!- could not hide the emotions the head of the Polish government.- We found safety.»

In Moscow, the arrival of the first U.S. LNG to Poland rather as a political than an economic event. Talked about this in an interview with radio Sputnik, head of sector, Institute for Energy and Finance Sergei Agibalov. Authoritative expert recognized Poland’s efforts to diversify suppliers, but drew attention to the fact that the American of more expensive Russian gas. Indeed, prices for LNG from overseas for 1-2 dollars exceeds the base price in North-West Europe. This, of course, would make the gas from America uncompetitive in comparison with Russian, if not all of the same political component. The price difference may soon disappear, says Oilprice, if the parties: U.S. exporters and European buyers will go to mutual concessions. Now this assumption is due to the same political situation and the flexibility of the Americans is quite possible.

Take, for example, Poland, the most developed of the Eastern European countries most dependent on gas supplies from Russia. Warsaw is experiencing a pathological hostility to Moscow and therefore are willing to fork out for energy independence from it.

And yet, no matter how much political desire to weaken energy dependence on Russia, even if Europeans will buy us more expensive Russian gas, with the financial-economic considerations can take precedence over political ones. Gazprom, of course, well aware that Europe is trying to diversify energy supplies, and taking action. The Russian gas giant, for example, has replaced long-term gas supply contracts of short, and also made gas prices more flexible. Obviously, the more the EU will try to weaken the dependence on Russian gas, the more «Gazprom» will try to improve its competitiveness. Despite the multi-billion dollar gas contracts with China, Europe remains for the Russian gas giant’s top market.

When competition between the us and Russian gas reaches its climax, the outcome will likely boil down to the players ‘ capabilities: to what extent Gazprom is ready to lower the price of gas, because it will lead to large losses. Of course, much will depend on the willingness of European countries to buy more expensive gas from America and also to bear serious losses.

For American exporters, the situation is complicated by the fact that «Gazprom» in the Old world is not their only competitor. Do not forget about the TRANS-Adriatic pipeline in Europe next year should go from the Azerbaijani gas field Shah Deniz. There is also Qatar, which is currently a lot of talk in connection with its conflict with other «water» States. Suffice it to say that in 2014, nearly a quarter (23%) of the gas exports of the Emirate were in Europe. American gas exporters in contrast to the US state Department are interested in the conflict between Riyadh and its allies and Doha does not stop as long as possible, because it makes the normal work of the Qatari gas industry.

With Qatar situation is different than with Russia, because Europe has no political differences with this tiny state on the Persian Gulf. The Europeans are willing to buy Qatari gas, which is also cheaper than the us. This means that without a significant reduction in the cost of gas production and transportation costs to U.S. exporters if they want to conquer the European market can not do.

Can American gas to compete with Russian in Europe? 19.06.2017

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