EU braces itself with US aid if Russian gas fails to arrive

Dhe preparations for the emergency in the Ukraine crisis have been in full swing between Brussels and Washington for weeks. The EU’s high dependency on Russian natural gas is not only a cause for concern for the EU Commission. Earlier this week, the US government officially confirmed for the first time that it was in talks “with major natural gas producers around the world to determine their capacity and willingness to temporarily increase natural gas production and to allocate these volumes to European customers.”

On Friday afternoon, President Joe Biden and Commission President Ursula von der Leyen released a joint statement emphasizing that both sides are working to ensure the EU’s gas supply security in the short term – i.e. within a few days or weeks – in the event of shortages, such as “those that could be triggered by a Russian invasion of Ukraine.”

According to the EU Commission, the preparations for this are well advanced. This applies both to the sanctions that the Europeans and Americans would impose in the event of a Russian invasion of Ukraine and to preparations for possible counter-sanctions such as the interruption of Russian gas supplies. Hardly anyone in the Commission believes that Russia will completely cut supplies to the EU. But you have to be prepared for the worst case, they say.

Share of LPG already increased

How concrete the agreements between the EU, the USA and other gas suppliers are and what they look like remains unclear. Energy Commissioner Kadri Simson and EU foreign policy chief Josep Borrell should continue to discuss this at the EU-US Energy Council scheduled for February 7, it was only said. At the same time, the EU will continue to negotiate with other countries that could compensate for any delivery failures.

Von der Leyen had already spoken to the Emir of Qatar on Thursday that Simson should travel on to Azerbaijan directly from the EU-US Energy Council. According to the commission, there are contacts with the Gulf States, Egypt, Algeria and Asian countries. It is also about barter transactions, such as the short-term redirection of gas promised to South Korea in long-term contracts to Europe.

According to the Commission, Russia is currently responsible for 40 percent of gas imports into the EU. For Germany, the proportion is even higher, at 55 percent. However, imports from Russia have already declined in recent months, so that Norway is now almost on par with an import share of 38 to 39 percent. The proportion of liquid gas (LNG) has also increased noticeably in recent months.

The utilization of the twenty large LNG terminals in the EU, which have been little used for a long time, is now 66 percent, according to Brussels. It could soon rise to 80 percent. In the past few weeks, some deliveries have been diverted to the EU. The United States is the largest LNG importer in the EU. Last year, however, a fifth of the liquid gas came from Russia.

It remained unclear on Friday to what extent a delivery failure from Russia could be compensated for by liquid gas. According to the Commission, if all existing LNG terminals were used 100 percent, around a quarter of gas imports could be covered. In view of the already high capacity utilization, however, the scope is limited. There is free capacity mainly in Italy and Poland.

The necessary pipelines to distribute the gas from the LNG terminals within the EU are there, assure senior EU officials. LPG is also just one of many components to be able to react to delivery failures. First of all, the EU will fall back on its gas storage facilities, which are currently 40 percent full, but will continue to be filled. In addition, it could increase imports through other, non-Russian pipelines and reduce consumption. Ultimately, it is also a question of price, which way the EU takes to compensate for delivery failures. It is certain that the price would continue to rise in the event of a Russian invasion of Ukraine.

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