New Market for Our LNG | Russell T. Rudy Energy LLC
With extensive reserves, prolific and flexible production, and depressed prices, domestic natural gas operators are aggressively seeking new markets. One new outlet is exports of LNG (liquefied natural gas). On April 26, a cargo of U. S. LNG was delivered to the Port of Sines in Portugal. Western Europe has the infrastructure to import, gasify and distribute LNG. U. S. sourced energy not only helps control prices through competition, it also helps offset dependence on Russia.
However, these economic and geopolitical benefits have thus far been confined to the Western part of the continent. The Central and Eastern European nations (CEE) have remained heavily dependent on Russian natural gas as there is no West-East distribution system. Fortunately for them, and for us, things are about to change.
At a recent meeting of the US-EU Energy Council, agreement was reached to construct a floating LNG terminal on Croatia’s Krk Island. With projected completion in 2018, this facility would become the gas hub for the CEE countries. The terminal, in concert with the CEE North-South Energy Corridor, would provide a new source of energy for the Baltic and Balkan nations such as Moldova, Romania, Bulgaria, Austria, Greece, Turkey and Ukraine. The new terminal would give these states access to LNG not only from the U. S., but also other producers such as Australia.
With gas prices across Europe a third of what they were three years ago, short term prices are not the incentive for the Krk project. Rather, diversifying energy sources, and reducing the dependence on Russian gas are the primary drivers. While Russia has not used reductions or shut-off of gas supplies as a geopolitical lever recently, the risk is obvious and significant. The Russians are already using their influence to pre-empt a Trans-Caspian pipeline as an alternative energy source for the EEC countries.
The article concludes that “These geopolitical factors leave the development of the LNG terminal on Krk perhaps the most promising new avenue for market-driven supply diversification for the CEE states. Furthermore, it provides a significant opportunity for the growing US LNG industry, which must find new demand amidst a global saturation of supply.”
To read the article in its entirety, please go to http://www.oilvoice.com/n/US-LNG-could-let-Eastern-Europe-diversify-its-energy-supply/3dfcb7441b03.aspx .
Russell T. Rudy Energy, LLC buys oil, gas and mineral interests nationwide. Please call (800-880-0940), or write (info@rudyenergy.com ) to let us know if you agree, disagree or would just like to comment on this, or any of our posts.
