Surprise: Russia Beats US in Supplying Europe with Gas

Business » ENERGY | June 19, 2024, Wednesday // 17:24
Bulgaria: Surprise: Russia Beats US in Supplying Europe with Gas

In May, natural gas imports to Europe from Russia surpassed those from the US for the first time since the onset of the Ukraine war, highlighting the EU's ongoing struggle to reduce reliance on Russian energy. Despite concerted efforts to cut ties with Russian fuels, one-off factors drove this shift, emphasizing the complexity of Europe’s energy landscape, according to the Financial Times.

Tom Marzec-Manser from ICIS consulting noted the irony of Russian gas gaining market share in Europe after extensive efforts to diversify energy sources. Following Russia's invasion of Ukraine in February 2022, Moscow slashed pipeline gas deliveries to Europe, prompting the region to boost liquefied natural gas (LNG) imports, primarily from the US. The US overtook Russia as Europe's top gas supplier in September 2022 and provided about 20% of the region's supplies in 2023. However, in May, Russian gas and LNG accounted for 15% of the total supply to the EU, the UK, Switzerland, Serbia, Bosnia and Herzegovina, and North Macedonia, while US LNG dropped to 14%, its lowest since August 2022. The change was influenced by increased European imports of Russian LNG, despite ongoing EU sanctions discussions.

Russia ceased gas supplies through northwestern European pipelines in mid-2022 but maintained deliveries through Ukraine, Turkey, and Bulgaria. May’s deliveries were influenced by temporary factors, including a US LNG export facility breakdown and increased shipments via Turkey before scheduled maintenance in June. Despite weak gas demand in Europe and high inventory levels, this situation is seen as temporary.

Marzec-Manser suggested the current situation might not last as Russia could redirect LNG to Asia via the Northern Sea Route during summer, reducing supplies to Europe, while US LNG production is expected to rebound. Additionally, a transit agreement between Ukraine and Russia is set to expire this year, posing a risk to those supply routes.

The European Commission is pushing for an investment plan to expand pipeline capacity in the Southern Gas Corridor between the EU and Azerbaijan. A senior EU official indicated that this route's supplies are insufficient to replace the 14 billion cubic meters of Russian gas currently passing through Ukraine annually.

European Energy Commissioner Kadri Simson, during a trip to Japan, discussed diverting LNG from Europe to Asia to meet demand. She stated that Tokyo and Brussels had established an "early warning system" to monitor LNG shortages and agreed on energy-saving measures. Simson assured that the EU is prepared for any disruptions in global gas markets, noting that gas inventories remain high and demand has decreased by 20% from 2021 levels.

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Tags: gas, europe, Russia, imports

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