Europe is taking unprecedented measures to reduce dependence on Russian gas. The German authorities have approved providing guarantees of €2 billion to private E.On company for its participation in the Canadian Goldboro project of liquefied natural gas (LNG) export, Reuters reported.
“In the past Germany provided state guarantees only to the pipeline proejcts and now the guarantees are required for LNG projects, which is a clear political signal of diversification of gas import,” said Frank Umbakh, expert of the European Energy Safety Centre.
E.On imports over half of gas to Germany and Goldboro project will be launched in early 2020. In this case at least 5 million tons (8 billionb cub.m.) of LNG a year will be delivered to EU a the spot prices. It has been also negotiating participation in the LNG projects and purchase of gas against state security in Mozambique, Israel, Peru and Columbia.
The other European countries also take measures. Last week Lithuania agreed with Norwegian Statoil to deliver 540 million cub.m. LNG a year since next year, which will cover about 16% of country’s need for gas.
Poland also continues building the terminal for LNG reception. It could be launched in 2015 and in theory deliveries via the terminal are able to cover a quarter of Polish consumption.
These measures do not allow completely ousting Gasprom from the European market – in 2013 only Germany bought 40 billion cub.m. of Russian gas. In its report for quarter 2, 2014, the gas monopolist claims that EU member-states could take active measures to reduce dependence on Russian gas and reduce Gasprom’s share.
In order to preserve its positions, Gasprom is ready to make concessions – take into consideration spot indexes in price formula and reduce obligations of “take or pay” contracts. In May 2014 Italian Eni achieved that and now E.On insists on revision of the price and filed an action to the Stockholm Arbitration.
After the accident on Fukusima-1 atomic power station, Japan buys about 40% of world LNG – 88 million tons, but the Japanese government is going to resume work of the reactors. After that a significant part of LNG could return to Europe, which could significantly affect Gasprom.
