The former executive vice president at Saudi Aramco, Sadad Al-Husseini, believes that there is not enough capacity in the world to replace Russia’s gas supply to the European Union with LNG.
In an interview for CNBC on Monday, Al-Husseini pointed out that the United States doesn’t have the LNG capacity to replace Russia’s exports to the EU while Russia, on the other hand, has plenty of markets to sell its energy to.
Heavily reliant on Russian gas, the EU is determined to wean itself off that energy source, building a replacement plan that involves building new LNG terminals and importing gas from elsewhere.
The LNG market, however, is currently a seller’s market and importers will have to commit to long-term contracts.
The fact is that Europe does not have alternative energy sources since OPEC is running out of spare capacity, North Africa has got problems and the US is maxed out already, so the problem is, in essence, a global one.
Noting that the situation he calls the new world – which is not a very good one for energy – could lead to serious problems in the global energy market, he noted that power bills are set to soar this winter across the EU.
According to Al-Husseini, it will take years for the European Union to find resources to replace the Russian supply since there isn’t enough LNG capacity in the world to make up for the Russian exports to Europe.
The fact is that Russia exports more pipeline gas to Europe than the entire LNG export capacity of either the US or Qatar.
The former executive added that despite Western sanctions and losing EU buyers, there are plenty of alternative markets for Russian energy, including China, Japan, or India, so Moscow isn’t set to lose much.
While the Russian economy may suffer under Western sanctions, Al-Husseini underscored that the rest of the world will also be suffering with them, stressing, however, that, in all probability, Russia will be recovering a lot sooner than Europe