GGP: LNG Versus Russian Gas In Central And Eastern Europe: Playing Poker On A Continental Scale
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This is an excerpt of an article by the Baker Institute, also published by Forbes on August 24, 2017.
The recent U.S. sanctions leveled against Russia, and Europe’s split reaction to those sanctions, reflect the ongoing struggle concerning energy security on the continent. Western European governments generally oppose the sanctions, as they would target the contentious Nord Stream 2 (NS2) project championed by the Russian and German governments, multinationals and German corporations. Western European countries generally accept the NS2 project as a way to access relatively cheap gas backed by large reserves. Conversely, many Central and Eastern European (CEE) countries welcomed the U.S.A.’s action against Russia because the region has been fighting NS2 based on the conviction that the pipeline would increase Europe’s dependence on Russian natural gas and halt other diversification projects, most importantly developments in LNG that allow non-Russian gas to access the CEE. NS2 is often predicted to strengthen Russia’s monopoly and geopolitical power, particularly in the CEE.
The move towards diversification away from Russian gas in the CEE has been based on three factors: 1) the generally higher prices that the region has been charged for Russian natural gas in comparison to those paid by less dependent Western Europe (Figure 1); 2) the broad belief that Russia uses the CEE’s dependence on its gas to increase its geopolitical influence in the region; and (3) concerns that growing Western European reliance on Russian gas could weaken Western Europe’s willingness to stand up to Russian interference in the CEE countries.
Nathalie Hinchey and Anna Mikulska
The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.