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What are Europe’s alternatives to replace Russian gas

The closure of the gas pipeline supplying Poland and Bulgaria from Russia It has raised all the alarms in Europe, which is urgently looking for alternative energy sources with which to supply Moscow’s gas.

The Kremlin had warned that from April 1 payments should be made in rubles, the local currency, something the international community refuses.

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The decision of Russia is a strategic retaliation against the EU, leveraging its power as the main supplier of natural gas to Europe, which before the Ukraine war bought about 40% of its gas from the Russian state-owned company Gazprom.

Experts believe that the geopolitical uncertainty due to the confrontation is driving up prices and increasing risk of gas supplies to other EU countries being cut off.


But who can fill the hole that Russia will leave if it decides to stop supplies to the Old Continent?

“In the short term, EU countries are likely to be able to withstand a large-scale disruption of Russian gas supply during the summerthanks to higher imports of liquefied natural gas from the US and Qatar, the use of gas storage and demand cuts,” said Levon Kameryan, senior analyst at Scope Ratings.

However, even in this scenario, he adds, “the rising prices could be very detrimental to the economic recovery of Europe”.

The first place European nations have turned to is the United States.

The world power promised to increase your liquefied natural gas ship shipments to Europe by 15,000 million cubic meters. They will be added to the 22,000 million cubic meters of last year.

But Russia sells about 155 billion each year, so it is clear that doing without the Russian supply requires looking for new suppliers.

Norway, due to its proximity and volume of production, is between the favorite destinations of the European Unionalthough countries like Germany have already rushed to strengthen ties with Qatar or the United Arab Emirates.

Norway's top gas producer Equinor has said it plans to boost exports to Europe.  (GETTY IMAGES).

Norway’s top gas producer Equinor has said it plans to boost exports to Europe. (GETTY IMAGES).

Thanks to its immense marine deposits, the Nordic country is the third world exporter after Russia and Qatar and covers 20% of the European natural gas demand and is currently the only country that supplies energy to Europe within the continent.

Its main clients are Germany, UK, Netherlands and France and with them Norway has direct gas pipelines that cross the North Sea.

The main Norwegian gas producer, Equinor, has said that plans to boost exports to Europe in the coming months by increasing production and postponing the usual maintenance shutdowns in the northern hemisphere summer.

Since Equinor is a state-owned company, behind the decision is the Norwegian governmentwhich has allowed production to increase by up to 1,400 million cubic meters.

Norwegian Prime Minister Jonas Gahr Store will support Europe's plans to reduce its energy dependence on Russia.  (GETTY IMAGES).

Norwegian Prime Minister Jonas Gahr Store will support Europe’s plans to reduce its energy dependence on Russia. (GETTY IMAGES).

Norwegian Prime Minister Jonas Gahr Store assured European countries in February that they will maintainhigh export volumes.

“Norway is delivering gas to the maximum of its capacity. The government is in contact with the companies in charge of production and export through the gas pipelines, and today they are delivering gas at full capacity“, explained Jonas Gahr Store.

“Equinor is also weighing other options, and the biggest potential comes from the giant field troll“explain experts from Rystad Energy, an analysis firm specializing in energy.

“Any additional gas shipments from Norway would alleviate Europe’s insufficient supply and help the region become less dependent on Russian gas,” Rystad Energy wrote in a report.

Norway has two other gas fields at full capacity: Oseberg and Heidrun.



On the lookout also in Africa

Algeria, Nigeria, Tanzania and other African countries are also on the radar of many of the big oil companies with business in Europe that are trying to close deals on the continent.

“Until now, oil and gas giants BP, Shell, ExxonMobil and Norway’s state-owned Equinor have indicated their intention to leave Russia, while Total will not make new investments,” say the firm’s experts.

Africa provided 18% of the gas imported from Europe for the last decade and is now preparing to increase that share.

“African gas production is currently expected to start increasing in the second half of this decade as new projects are launched. The new wave of project acceleration could fuel this boom.”

And he cites examples such as that of the Italian company Eni, which will accelerate its project in congo and aims to help bring supplies to Europe from projects in Algeria, Egypt, Nigeria and Angola.

For their part, Shell, Equinor and ExxonMobil have important plans in Tanzania.



new infrastructures

In a way, Poland and Bulgaria were already prepared for this disconnection from Russia thanks to the fact that the European gas network is connected to be able to share supplies among its members, says Norbert Rücker, chief economist and analyst Next Generation Research at bank Julius Baer.

“Both countries, with the help of the European Union, have been preparing for that event for a few years and therefore they were also among the first to announce the complete elimination of Russian supply contracts this year,” says the economist.

Rucker recalls that there are two gas pipelines that are about to be put into service in the middle of the year, which will connect Poland and Bulgaria to Europe’s natural gas network and give them access to Norwegian or foreign maritime supplies.

One of them is the Baltic Pipe, between Norway and Poland via Denmark.

Completed “by the end of the year, in October or November”, according to Polish Prime Minister Mateusz Morawiecki, it will allow 10 billion cubic meters of Norwegian gas to be transported to Poland each year, enough to cover half of their consumption.

“The cutoff by Russia is therefore primarily a threat and an escalation for major buyers remaining natural gas in Europe”, he adds.

Source: Elcomercio

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