U.S. Moving Closer to Become Russia’s Top LNG Rival

The United States, which plans to become Russia’s major competitor in the European gas market, has become a net gas exporter for the first time in 60 years, Moscow business newspaper Kommersant reports.

In recent years, the U.S. has systematically increased production, expanding pipe gas supplies to Mexico and Canada, in addition to building liquefaction plants. Washington is focusing on LNG whose production in the U.S. can grow to 70 million tons by 2020, in the fierce struggle to clinch markets, the report says.

The U.S. has already said that it is gearing up for serious competition with Russia in the gas market, including the European segment, the biggest market for Russia’s Gazprom energy giant. However, according to Kommersant, Gazprom has so far taken the prospects for such competition last lightly, arguing that the bulk of its LNG supplies traditionally goes to the Asian markets.

According to Vyacheslav Mishchenko from Argus Media (Eurasia), the U.S. as an exporter is focusing on the LNG market, but the situation is changing very rapidly.

“We saw an illustrative example at the beginning of the year. A lot was said that the U.S. would supply an abundance of liquefied gas to Europe. However, as a result, due to a storm and severe frosts on the East Coast, the country imported gas from Russia. In early January, the first batch of LNG from Novatek’s Yamal LNG plant was delivered to Boston,” the paper quotes the expert as saying.

Another tanker carrying gas from Yamal arrived there on March 3.

“So, it is not necessarily the case that the U.S. will be able to consolidate its net exporter status for many years since the LNG market is changing quickly,” Mishchenko says.

According to the expert, the growth of LNG use in many countries will be limited by the low level of infrastructure development and the internal network of gas pipelines.

Be the first to comment

Leave a Reply

Your email address will not be published.