Russia Wins Big in European Gas War

There has been a lot of talk on both sides of the Atlantic about the US pivot and efforts at locking in natural gas market share in Europe.

Much of this comes amid US President Donald Trump’s push for American energy independence as well as both US and several EU members' thrust to wean Europe off geopolitically charged Russian gas.

In fact, Trump has pushed for US-sourced LNG to become so much of the EU’s energy security that several European states, particularly Germany, have accused the president of playing energy geopolitics, cloaking American concern for European energy security for the benefit of US LNG producers, RT reported.

Now, however, Trump and US LNG exporters will have an even harder time convincing key EU members to offset overreliance on Russian piped gas with US LNG.

Last week, Gazprom, the world’s largest gas producer and the European Commission resolved a seven-year anti-trust dispute after the Russian state-controlled energy giant agreed to change its operations in central and Eastern Europe.

Per terms of the deal reached on Thursday, Gazprom will be banned from imposing restrictions on how its customers in central and Eastern Europe use gas.

Meanwhile, Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia will no longer be banned from exporting gas to another country.

These countries originally sought to remedy over pricing problems for Russian gas. Going forward, customers in Bulgaria, Estonia, Latvia, Lithuania and Poland have the right to demand a price in line with those in Germany and the Netherlands.

The deal has teeth since these customers can take their complaints to an EU arbitration body, if Gazprom fails to live up to the terms of the new settlement.

It is a win situation for Gazprom since its agreement avoids billions of dollars in penalties that could have been levied by the European Commission, while it also helps the firm solidify its hold on European gas markets.

It is also a victory for Russia overall, which has seen several LNG players, notably Qatar and the US, vie for market share at the expense of Russian gas producers.