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    US to Invest $1bn in European Energy

Summary

The US secretary of state also used the speech to take aim at Russia's Nord Stream 2 project.

by: Joseph Murphy

Posted in:

Natural Gas & LNG News, Europe, Liquified Natural Gas (LNG), Political, News By Country, EU, United States

US to Invest $1bn in European Energy

The US will invest up to $1bn in the Three Seas Initiative, aimed at developing energy, transport and digital connectivity in central and eastern Europe, Secretary of State Mike Pompeo told a security conference in Munich, Germany on February 15.

The financing will come from the US International Development Finance Corp (IDRC), with support from the US Congress, Pompeo said.

"Our aim is quite simple: It is to galvanise private sector investment in the energy sector to protect freedom and democracy around the world," he said.

The US is vying for a larger stake of the European gas market, and is already working with some eastern European countries to develop their grids in order to make room for US LNG supplies. Russia is the primary supplier to many countries in the region.

Pompeo did not mince words regarding the US' opposition to Russia's Nord Stream 2 gas pipeline to Germany. "When Russia suggests that Nord Stream 2 is purely a commercial endeavour, don't be fooled," he said. "Consider the deprivations caused in the winters of 2006 and 2008 and 2009 and 2015."

The US imposed sanctions on the 55bn m3/yr pipeline to Germany in late December, bringing its construction to a halt. This led Moscow to delay its launch until late 2020 or early 2021.

Russia "can't" complete Nord Stream 2 on its own, US Energy Secretary Dan Brouillette told Bloomberg on February 15 at the same Munich conference, while also predicting "a very long delay" for the project, "because Russia doesn't have the technology." He told the news agency. "If they develop it, we'll see what they do. But I don't think it's as easy as saying, well, we're almost there, we're just going to finish it."

"Never say never," a representative of Gazprom told the Russian press on February 16 responding to Brouillette's comments.

Unable to rely on foreign contractors, Russia has said it plans to use its own pipelaying vessel to complete the remaining 6% of Nord Stream 2. The Akademik Cherskiy, which Moscow has suggested would be suitable for task, left the Far Eastern port of Nakhodka on February 9.  But rather than heading westwards, it is bound for Singapore. 

Gazprom selected a contractor to install welding equipment on the Akademik Cherskiy on February 10, according to Russia's state procurement website. The work is valued at rubles 873.6mn ($13.8mn). The vessel is therefore likely travelling to Singapore, a hub for shipbuilding, for these upgrades. However, procurement information stated that the purpose of these upgrades was to prepare the vessel for work at offshore gas fields in the Far East, rather than at Nord Stream 2.