Bloomberg: Flip Side of Russia-China Gas Deals Benefits Australia Suppliers

Russia’s deepening energy ties to China may not be all gloom for Australian natural gas.

While Russia’s second gas-supply deal with China will lessen its dependence on Europe as a customer, on the flip side Europe is looking to reduce its reliance on Russia, according to Origin Energy Ltd., which is building a $22 billion liquefied natural gas export project in eastern Australia.

So Europe is “likely to lift their imports from other areas,” Grant King, managing director of Origin, said today in a Bloomberg Television interview in Brisbane. “Australian LNG, which has typically gone into China, may well become part of that re-balancing.”

China and Russia signed a preliminary gas-supply accord on Nov. 9, broadening their links after a $400 billion deal earlier this year. The new Russian supplies will make it harder for proposed Australian LNG projects to compete in an already crowded market, according to a Macquarie Group Ltd. report.

Some Australian suppliers also could benefit as Europe is looking at Australian gas as an option to cut its reliance on Russian energy supplies, Dominique Ristori, the director general for energy at the European Commission, said in an interview with the Australian Financial Review last month. MORE