[19] Both countries will be responsible for building new infrastructure to make the transport possible. [9][10] The largest non-EU importers of Russian natural gas are Ukraine, Turkey and Belarus. In the whole of 2017, only 10 percent of U.S. LNG exports went to the EU. In 2018, Russia exported 243 billion cubic meters of gas through pipelines. Historically, these states have a rather strained relationship with Russia, says Senior Researcher Jakub Godzimirski at the Norwegian Institute of International Affairs (NUPI). There are two potentially large shale gas … Russia has long been the dominant source and supplier of natural gas to Europe. [5] Russia consumes approximately 457 bcm a year, second only to the United States. Showing the extent of much of the EU's reliance on Russian gas, the Commission noted that 11 member states (Bulgaria, Czech Republic, Estonia, Latvia, Hungary, Austria, Poland, Romania, Slovenia, Slovakia and Finland) imported more than 75 percent of total national imports of natural gas from Russia in 2018, largely due to their proximity to the country. In addition there is Russian Gazprom, where the Russian state holds a majority of the shares. [20][21][22] The United States has been encouraging European countries to diversify Russian-dominated energy supplies, with Qatar as possible alternative supplier.[23]. Russia's gas exports to Europe rose 8.1 per cent last year to a record level of 193.9bn cubic metres (bcm), despite rising competition and concerns about the country’s dominance of supply. Even though EU skepticism has increase in the past years, the project is nevertheless carried through by Germany, Europe’s economic machine, and large energy corporations in a series of European countries, such as German Uniper and Wintershall, Austrian OMV, French Engie and British-Dutch Shell.

In doing so, it will cement its role as Europe’s primary gas supplier and expand its influence in the Middle East, posing serious risks to U.S. and European interests. [8] On 4 January 2006, a preliminary agreement between Russia and Ukraine was achieved, and the supply was restored.

For Estonia, Poland, Slovakia and Finland, more than 75% of their imports of petroleum oils originated in Russia. Following American sanctions affecting the project before the end of 2019, the opening of the pipeline has been postponed towards the end-of-year 2020. ', "France says U.S. sanctions on Iran, Russia look illegal", "U.S. wants Qatar to challenge Russian gas in Europe -U.S. official", https://de.statista.com/statistik/daten/studie/37985/umfrage/verbrauch-von-erdgas-in-deutschland-nach-abnehmergruppen-2009/, "Russia turns off oil taps supplying Belarus", https://en.wikipedia.org/w/index.php?title=Russia_in_the_European_energy_sector&oldid=977166288, Energy policies and initiatives of the European Union, Wikipedia articles in need of updating from August 2018, All Wikipedia articles in need of updating, Articles with unsourced statements from April 2013, Creative Commons Attribution-ShareAlike License, This page was last edited on 7 September 2020, at 08:32. "Netback" is the price that Russian gas is sold for at the border, minus the cost of transportation and taxes imposed on exports.

"Russia has maintained though throughout the whole period 2007-2017 its position as the leading supplier to the EU of the main primary energy commodities – hard coal, crude oil and natural gas". High North News is not responsible for the content or opinions expressed on external web pages. It will transport approximately 14 percent of Moscow’s gas exports to Europe, via Turkey and Greece. "[13] Since then, the variety of national policies and stances of larger exporters versus larger dependents of Russian gas, together with the segmentation of the European gas market, has become a prominent issue in European politics toward Russia, with significant geopolitical implications for economic and political ties between the EU and Russia. The USA considers the pipeline a threat to the market position of American LNG. The construction of North Stream 2 is nearly complete, however, the halt to the work means the project will become more expensive as well as delayed. The situation calmed until October 2007 when new disputes began over Ukrainian gas debts. All Rights Reserved. Ronald Reagan feared that a Kremlin-controlled European natural gas pipeline infrastructure would increase the USSR's influence not only in Eastern Europe, but also in Western Europe. In 2009, Qatar proposed the construction of a pipeline to send gas from the massive South Pars/North Dome field (which it shares with Iran) via Saudi Arabia, Jordan, Syria, and Turkey. Europe’s energy security and America’s influence in the Middle East are too important to cede to Russia. [2], During 2005, Russia claimed Ukraine was not paying for gas, but diverting that which was intended to be exported to the EU from the pipelines. The background for the construction is simple: The need for import increases while European countries simultaneously produce less gas. Shale gas. [20] The total value of the deal was estimated at US$400 billion. Don’t miss our exclusive Washington is not completely without options, however. Assessment report of directive 2004/67/EC on security of gas supply {COM(2009) 363}", "Merkel, Medvedev inaugurate new gas pipeline", "A Market Between Us: Reducing the Political Cost of Europe's Dependence on Russian Gas", University of Cambridge Electricity Policy Research Group, "Europe's Declining Gas Demand: Trends and Facts about European Gas Consumption", Germany's Angela Merkel slams planned US sanctions on Russia, "EU documents lay bare Russian energy abuse", "Germany and Russia gas links: Trump is not only one to ask questions", "Trump barrels into Europe's pipeline politics", Germany threatens retaliation if U.S. sanctions harm its firms, The U.S. Sanctions Russia, Europe Says 'Ouch! Twitter: @Greg_Everett. In the medium term, they’ll make it hard for the country to keep up oil production, satisfy domestic demand, and fund the government.

As well as the Nord Stream pipeline and its expanded version, Nord Stream 2, linking Russia to Europe via the Baltic Sea (the expanded pipeline is seen as a way to bypass transit countries like Ukraine), Gazprom and partner companies in Poland, Belarus and Germany oversee the 2,000 kilometer Yamal-Europe pipeline that sends gas from one of its production centers in Torzhok (via Belarus and Poland) to Germany. Already Europe’s biggest gas user, Germany gets about 40 percent of what it consumes from Russia, the world’s largest exporter, according to industry consultant Wood Mackenzie Ltd. in … 8049 Bodø

Washington could supplement its approach with commitments to facilitate the export of U.S. LNG to Europe, if Moscow were to weaponize its gas exports and turn the taps off. However, the Ukraine has managed to distance itself from Russian gas in later years, Arild Moe points out. Russian oil machinations in Syria started well before the Kremlin’s 2015 military intervention. As of 2013, Russia is the world's second-largest producer of natural gas, producing an estimated more than 669 billion cubic meters (bcm) of gas a year, and the world's largest natural gas exporter, shipping an estimated 196 bcm a year. Photo: Axel Schmidt / North Stream 2. The ensuing revolution placed those plans on hold, but Russian activity is likely to increase as Syria turns to reconstruction. Moscow’s involvement in Lebanon has a Syria angle as well. In five years, the Russian export of natural gas to Western Europe has increased by 40 percent. U.S. exporters looking to Europe have a big obstacle in the region, however, and that's Russia. [14] The EU’s failure to successfully advance a common energy policy can be further exemplified by the building of the Nord Stream pipeline, which embodies the divisions between the center and the periphery of the EU—between Old and New Europe. A gas hub in Baumgarten in Austria. [2], The Russian state-owned company Gazprom exports natural gas to Europe. “The reactions against the pipeline project are understandable and dependent on the countries. [2] As of 2009, Russian natural gas was delivered to Europe through 12 pipelines, of which three were direct pipelines (to Finland, Estonia and Latvia), four through Belarus (to Lithuania and Poland) and five through Ukraine (to Slovakia, Romania, Hungary and Poland). U.S. LNG is a keen entrant to the European market. It saw exports of its LNG rise 58 percent through the first half of 2018, compared with the same period in 2017. U.K., Netherlands, Italy, Spain, Portugal etc.).

What's more, much of Russia's natural gas is pumped through Ukraine, a risky route given the conflict between the two countries. The 1,200-kilometer-long gas pipeline will transport around 55 billion cubic meters of Russian natural gas from Russia to Germany every year. Get this delivered to your inbox, and more info about our products and services. Photo: North Stream, The Swiss operator placing the pipes on the seabed stopped working immediately upon the USA’s announcing sanctions against North Stream 2 just before the end of 2019. Exports of crude oil and petroleum products represented nearly 70% of total Russian petroleum liquids production in 2016.

North Stream 2 cannot fully replace the Ukraine, and that has given Ukraine a better negotiating position than originally expected”, Moe says. Russia accused the Ukrainian side of siphoning gas from pipelines passing through Ukraine in 2009.

On 21 December last year, President Donald Trump approved American sanctions against companies involved with the construction of the pipeline. A Europe even more dependent on Russian gas will lose significant leverage over the Kremlin, constraining its ability to punish the country for transgressions like the killing of Russian defectors on European soil. Russia–Ukraine gas disputes left many countries with a significant drop in their supplies when Russia cut off all natural gas supplies passing through Ukraine in 2009 and 2006. Russia’s Gas Web Ensnares Europe The production of natural gas in EU states dropped with 8.1 percent from 2017 to 2018, according to statistics from Eurostat. And then, in October 2017, Rosneft took a controlling interest in an existing KRG oil pipeline to Turkey for $1.8 billion.

In Syria, meanwhile, Russia won the exclusive right to produce the country’s oil and gas in January 2017. [25] Aftermarket conversion kits are sold by companies like Italgas, while some GAZ Group vehicles are sold with natural gas systems.

newsletter, Energy Source. This dependency can be used and abused by some. Photo: Axel Schmidt / North Stream 2. With the Trump administration deciding to leave Syria as Russia remains firmly ensconced there, any energy infrastructure projects that transit through Syria will need Moscow’s approval. European capitals are fully aware that Russia repeatedly has used gas as a political tool towards both neighbors like the Ukraine and Belarus. There is, to a certain degree, a question of mutual dependency in which a good relationship is in everyone’s interest. The Commission, the EU's executive arm, expects U.S. gas exports to the region could double by 2022 and has vaunted the construction of LNG terminals across Europe.