After launching its Yamal LNG project, Russia has every chance of occupying its own niche in the global energy market, RIA Novosti contributor Dmitry Lekukh wrote, commenting on the Russian liquefied natural gas finding its way to the American market. According to Lekukh, Russia’s LNG could freely compete with American hydrocarbons in the EU.
When a tanker carrying the first batch of Russian liquefied natural gas (LNG) arrived at the US city of Boston, observers just shrugged their shoulders; however, when the news emerged that the second one is going to head for the US eastern coast, many were caught by surprise.
According to RIA Novosti contributor Dmitry Lekukh, “that’s a different story.”
“If the Russian LNG is able to compete with American ‘shale’ [gas] on the US market, then try to guess what it will do with [America’s hydrocarbons] in Europe, which is much closer [to Russia],” the contributor suggested.
Commenting on the first delivery of Russia’s LNG to the US, Alexander Novak, the head of the Russian Energy Ministry, the “gas was no longer Russian” as it was purchased by French Engie from Malaysia’s state oil and gas company Petroliam Nasional Berhad (Petronas).
However, it does not seem to be a problem, according to Lekukh, the Russian liquefied gas has a good chance of winning over its competitors.
He noted that the world market of LNG, which the Russian Federation has entered after kicking off its Yamal project, is regulated differently than that of oil and does not have a “political component.” The RIA Novosti contributor believes that Novatek’s LNG may change the situation on the global gas market in a cardinal way.
Lekukh suggested that US businessmen are well aware of this potential trend. However, their ultimate goal is the globalization of gas markets, he pointed out.
“This globalization will inevitably lead to the increase in energy costs in Europe: [LNG] ‘spots’ are more expensive than traditional ‘pipeline’ contracts. Moreover, their price can be artificially regulated in the short-term through stock mechanisms,” the journalist explained.
That means that, first, the US shale gas will undoubtedly occupy its niche in the global market; and, second, it’s likely that the US will manage to “knock out” its main competitors, namely the Europeans, from the global energy market due to “tax reforms,” relatively cheaper labor and less socially-oriented economy, Lekukh assumed.
According to the journalist, it fully corresponds to the Trump strategy announced at the recent Davos forum, which read between the lines that Trump is going to “fight” and “negotiate” with China and Russia, at the same time expelling the Europeans from their traditional market positions.
“And it is not a coincidence that both [German Chancellor Angela] Merkel and [French President Emmanuel] Macron demonstratively left the forum before the speech of the American president,” Lekukh remarked. “They already knew how he was going to do business with them and what will happen to their businessmen.”
Trump’s message is clear, the journalist noted, if you want to prosper, transfer your money and your production facilities to America.
The Russian Arctic-based Yamal LNG is focused on natural gas production, liquefaction, and shipping of hydrocarbons. The joint project brought together Russia’s Novatek, France’s Total, China National Petroleum Corporation, and the Silk Road Fund.
Addressing the representatives of the Franco-Russian Chamber of Commerce and Industry on Thursday, Russian President Vladimir Putin highlighted the issue of the shipments of Russian gas to the United States.
The second tanker with liquefied natural gas from Russia is due to reach the American shores on February 15.