News that Russian liquefied natural gas from Yamal is being transported to the USA for the first time, via a French intermediary, came as quite the surprise.
Washington is doing everything it can to make it harder for Russia to export gas to Europe. And now the USA itself is buying Russian gas?
Energy prices in the USA have temporarily spiked because of the recent cold snap there. The country suddenly needs natural gas to cope with the severe weather, and it’s turning to the international market for a solution.
Russia is the world’s biggest exporter of natural gas. And for decades, Moscow has been dependent on the pipelines that carried the valuable commodity from its gas fields in northern Russia and Siberia to Western Europe.
State energy giant Gazprom still does the majority of its business via these pipelines. They are often the subject of disputes, however, as there are always several countries involved.
However, Novatek has been developing a gigantic liquefied natural gas delivery system on the Yamal polar peninsula. Novatek controls 60% of the operation, but the French oil company Total is also involved, as are Chinese investors.
The Kremlin is trying to reduce its financial dependency on natural gas. Like other exporters, it’s relying more and more on liquefied natural gas.
Liquefied gas is created by cooling natural gas until it is condensed into a liquid, thereby allowing it to be transported via tanker rather than through a pipeline. Russia’s second-largest gas producer, Novatek, is particularly active in this area.
Generally speaking, it’s difficult for Russia and other states to export to the USA. “Prices are low there, because the Americans have enough gas of their own.
It’s quite possible that the USA will take the occasional tanker of liquid gas from Russia in the future, too. But experts in Moscow believe it will always just be comparatively small amounts.
The USA-Russia transaction is indicative of how the energy business is changing all over the world.
Deutsche Welle / ABC Flash Point News 2019.