• Natural Gas News

    Eastern Europe Seeks US LNG Amidst Ukraine Crisis



Eastern European countries seek ways to cut reliance on Gazprom and are turning to the US and its liquefied natural gas resources.

by: Linas Jegelevicius

Posted in:

Natural Gas & LNG News, News By Country, , Bosnia-Herzegovina, Lithuania, United States, Estonia, Hungary, Liquefied Natural Gas (LNG), Top Stories, Balkans/SEE Focus

Eastern Europe Seeks US LNG Amidst Ukraine Crisis

As the Ukraine crisis has spurred Eastern European countries to seek ways of shaking off reliance on Russian Gazprom, once the Eastern-bloc states are increasingly turning to the US and its liquefied natural gas resources.

As a number of Eastern European countries, including Lithuania, Estonia, Hungary, and Bosnia and Herzegovina are in talks with Gazprom over the new LNG supply contracts, the US gas card may play an important role amid the looming unpredictability over Gazprom's gas price.

Responding to Eastern European countries’ requests to mitigate the constraints on the US LNG export, Obama administration has approved already seventh LNG export permit.

“The process has definitely already moved forward. Ask all the experts around - natural gas will be cheaper in the future as a result,” said Jaroslav Neverovich, Lithuanian Energy minister, to the Financial Times ahead of his trip to the US where he implored US senators last Tuesday to help expedite the permitting process for US companies to export LNG from the United States to the global markets, including Eastern European countries.

Affirming that Lithuania and other nations’ dependence on Russian gas “is crippling,” the minister along with American energy experts testified before the US Senate Committee on Energy and Natural Resources. The hearing comes amid talks at other two US congressional committees and the Senate mulling whether exporting more natural gas overseas, especially to the Crimea crisis-sensitive Eastern Europe will weaken Russia’s influence in the region and bolster US allies.

“I am here to plead with you and your colleagues to do everything within your power to help us achieve our core objective (energy independence) - expedite the release of some of your abundant natural gas resources into the world market…Accelerating America’s entry into the global natural gas market is a win-win-win situation. America wins through job creation, economic growth and more revenues for the government. Customers in Europe win by (gaining) access to more competitively-priced gas from the US, and strategic cooperation of NATO allies would be strengthened,” the minister said in the hearing.

He emphasized that Lithuania pays “a political price” for Gazprom's gas, which is 30 percent steeper than what most other European consumers pay.

Lithuania has already taken a stride to step up its national energy security - an LNG terminal in the seaport of Klaipeda is expected to start operating at the end of this year.

Earlier, Lithuania’s President Dalia Grybauskaite in meeting in Vilnius with US Vice President Joe Biden said that “Lithuania is interested” in importing LNG gas from the US.

Lithuania expects that a selected company will be able to supply a minimum volume of 540 million cubic meters to the Klaipeda facility, slated for launch in late 2015.

According to some reports, Lithuania is in talks with US energy company Cheniere, which has a pending exports permit application.

US Ambassador to Lithuania Deborah McCarthy also believes that LNG from the United States could reach Lithuania by late 2015.

“…There is also a huge demand also for our LNG from very, very, very large markets, so there is obviously competition going forward,” McCarthy underlined.

So far, US LNG export permits have been issued to six US companies.