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    US LNG Prices to Latvia Could be Better Than Those of Gazprom



Latvia’s Economy Minister Vjaceslavs Dombrovskis says that US LNG pricing is more competitive than what Gazprom has to offer.

by: Linas Jegelevicius

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Natural Gas & LNG News, News By Country, , Latvia, United States, Liquefied Natural Gas (LNG)

US LNG Prices to Latvia Could be Better Than Those of Gazprom

Even after deducting the costs of sea ferrying and the gasification of US LNG, the American price is still more competitive than what the Russian gas company ' Gazprom is offering, said Latvia’s Economy Minister Vjaceslavs Dombrovskis.

Pointing out that the United States has become a major player in the LNG market using the latest technologies and investing hugely shale-gas exploration and extraction, the minister described the Americans’ presence in the energy market as “revolutionary”.

In 2013, the United States even overcame Russia as the world’s largest energy producer.

'”At the moment, the sale price of US gas in the United States is about half the price consumers in Germany pay. Furthermore, the United States is constructing several liquefied natural gas export terminals which may be a game-changer in the short-term,”  Dombrovskis emphasized.

However, among the risk factors are the the certain void in the legislation. US companies can freely export gas only to countries with which the United States has signed free-trade agreements with. '

“Discussion is moving forward with Europe on this, but it is hard to predict when such an agreement will be hammered out. In order to export gas to countries with which the U.S. does not have a free-trade agreement, a special U.S. government license needs to be obtained, and having them ready  takes considerable time,” the minister explained.

The second distraction is the handful Asian countries are prepared to pay more for liquefied natural gas than Europe. This means  Europe needs to pep up US companies to export gas to Europe.

“By rushing into something without proper consideration, we could risk constructing a liquefied natural gas terminal which would sit empty, or purchase liquefied natural gas for Asian prices, which could be approximately 50 percent more than what we are paying at the moment,” Dombrovskis admitted.

He also believes that if Poland, Lithuania, Latvia, Estonia and Finland come together for a regional solution, then the region as entirety would become attractive for US LNG suppliers.

However, an agreement among the three Baltic States may stall as based on the experience from previous years of dealing the tiny Baltic States really accord on energy issues in unison.

'”If we are not capable of coming to an agreement with our regional partners, than we will have to begin thinking about the development of our own national liquefied natural gas system and construct a terminal ourselves, just like Lithuania is doing in Klaipeda,” Dombrovskis said.

Latvian PM Straujuma had said after returning from her visit to the United States last week that US LNG vessels could start mooring in Latvian seaports in about two years.

Straujuma, who had meetings with US LNG companies’ representatives, cited them as saying the price of US gas is competitive to that of Russia’s.

“Now we must do our homework and decide on our energy independence,“ Straujuma said.