Europe’s alternatives to Russian gas FACT-CHECKED: What options do we really have?
Boris Johnson outlines plan to phase out Russian oil and gas
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Russia supplies around 40 percent of all natural gas imported by the continent. After an EU summit in Versailles earlier this month, EU leaders agreed to “phase out our dependency on Russian gas, oil and coal imports as soon as possible” in a joint statement.
Currently, 75 percent of the EU and UK’s supply arrives through pipelines, according to the US Energy Information Administration.
This is in addition to liquified natural gas (LNG) imports which are delivered in specially designed sea in tankers kept at -160C (-320F).
President Vladimir Putin has said Russia remains committed to supplying gas to the rest of the world, despite the harsh sanctions issued.
But if Europe is serious about weaning itself off Russian supply, where else can it look to meet its gas demands?
Can pipelines provide additional supply?
In addition to Russia, Norway and Algeria supply large volumes of gas to Europe through pipelines.
Algeria provides about two-thirds of Spain and Portugal’s annual gas imports through the Algeria-Spain Medgaz pipeline.
As one of the world’s largest gas producers, Algeria could have capacity to increase its supply – but the nation’s political relationship with neighbouring Morocco and strategic military alignment with Russia prevent this.
Most of the UK’s imported gas comes through the Langeled pipeline from Norway – the continent’s largest producer after Russia.
Norwegian prime minister Jonas Gahr Støre has said the country is delivering natural gas at maximum capacity and is unable to replace Russian supplies.
How can LNG imports help Europe?
LNG is a highly versatile fuel and is made by cooling natural gas into a liquid form which shrinks the volume making it easier and cheaper to transport and store.
This makes it a popular alternative to piped gas and helps improve energy security – something Europe is aiming for.
The largest LNG exporting countries in the world in 2020 were Australia, Qatar and the United States, According to BP.
LNG sources have diversified over the past decade but countries are already exporting near full capacity.
LNG is yet to be widely used across Europe but in 2020, Portugal imported 56 percent of its gas as LNG from Nigeria and 17 percent from the US. Meanwhile, Spain imported 35 percent of its gas as LNG.
Which nations can help Europe with LNG supply?
Australia is one of the largest LNG suppliers in the world, and the chief executive of Santos, one of the country’s largest LNG producers, has said a small amount could be made available to Europe.
Kevin Gallagher told the Financial Times that just 16 percent of his company’s LNG production was available for sale on the spot market, warning: “I’m not sure that would be enough for them [Europe].”
Meanwhile, the US government has said it would increase LNG exports to Europe to help ease reliance on Russian gas but progress has been slow due to climate concerns.
Europe is the top receiver of US LNG but with the country unable to provide much US President Joe Biden has promised to help find alternative sources.
Qatar is another nation the UK is looking to.
In 2011 Qatar accounted for 98 percent of the UK’s total LNG imports – but today the UK imports from nine sources, with Qatar making up just 48 percent of LNG imports to the UK followed by the US with 27 percent.
Qatar was reluctant about stepping up to support European gas demands after the US asked the country to help fill any shortfall.
Qatar is geographically well-placed to help ease the gas crisis but would need consent to divert supplies to Europe from its Asian clients, the biggest buyers of Qatari LNG.
The country has said it would not be willing to break its long-term contracts to meet European demands but the EU has previously put any prospect of a deal on hold over antitrust concerns.
Qatar’s Energy Minister Saad al-Kaabi told Reuters in February before Putin invaded Ukraine: “There is no single country that can replace that kind of volume, there isn’t the capacity to do that from LNG.”
He added: “Most of the LNG is tied to long-term contracts and destinations that are very clear. So, to replace that sum of volume that quickly is almost impossible.”
What about Saudi Arabia?
Saudi Arabia has an estimated 17 percent of the globe’s known oil reserves and as the world’s largest exporter, meaning the Middle Eastern nation would be well placed to cover Russian energy dependence.
Last week, UK Prime Minister Boris Johnson travelled to the Middle East with hopes of negotiating a deal on oil production and to see if they would increase their output in support.
He met with Saudi Arabia’s Crown Prince Mohammed bin Salman and Abu Dhabi’s Crown Prince Mohammed bin Zayed.
And on Sunday, state-owned oil giant Saudi Aramco announced plans to sharply increase the amount it invests in energy production after it reported a doubling of profits in 2021.
Saudi Arabia is the largest producer in the oil cartel Opec (Organization of the Petroleum Exporting Countries) and raising production could help to reduce energy prices.
However, the country has been condemned for a range of human rights abuses, including its involvement in the conflict in neighbouring Yemen, the murder in 2018 of journalist Jamal Khashoggi, for jailing dissidents and for widespread use of capital punishment.
Mr Johnson said of his visit: “We discussed everything that you would expect, so I raised human rights, but we also talked about what we can do to stabilise oil prices, to fight inflation, to help consumers, to help people at the gas pumps, at the petrol pumps.
“A lot of agreement that it’s important to avoid inflation, to avoid the damaging economic consequences, an agreement that we need to work together to bring peace to Ukraine.
“I thanked the Saudis for what they’re doing ‒ they joined the UN resolution in condemning what Russia has done. Both agreed that we need to see an end to Putin’s war.”
But the Labour Party accused the Government of going “cap in hand” from one dictator to another to tackle the energy crisis.
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Europe’s liquified natural gas capacity
Even if nations were able to increase LNG exports to Europe the continent does not have sufficient storage facilities to support increased capacity.
In January, German Chancellor Olaf Scholz announced that Germany would construct two LNG terminals in response to the country’s dependence on Russian natural gas.
Most of Europe’s LNG terminals are in Spain, France and the UK. In addition to Germany, Cyprus, Finland and the UK are all planning more terminals.
This would mean LNG imports could be distributed more widely across the continent.
However, LNG imports are very sensitive to market changes with the price for LNG in northwest Europe rising 29 percent on February 24 when Putin announced his invasion of Ukraine.
Is replacing Russian gas with more gas the best option?
To fill energy demands it may be necessary to look beyond alternative gas sources and diversify energy supply, experts say.
Executive Vice-President for the European Green Deal, Frans Timmermans said: “It is time we tackle our vulnerabilities and rapidly become more independent in our energy choices.
“Renewables are a cheap, clean, and potentially endless source of energy and instead of funding the fossil fuel industry elsewhere, they create jobs here.
“Putin’s war in Ukraine demonstrates the urgency of accelerating our clean energy transition.”
And Carlos Torres Diaz, head of gas and power markets research at analysts, Rystad Energy said: “There is some capacity from the power sector to generate more electricity with coal, and biofuels and there’s also some new wind and solar products coming online.”
Therefore, alongside seeking higher LNG imports and pipelines from non-Russian suppliers Europe should focus on alternative energy supplies.
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