The EU’s dependency on liquefied pure gasoline has soared because of the lack of Russian pipeline gasoline
The EU has considerably elevated its reliance on liquefied pure gasoline (LNG) imports because of the bloc’s determination to cease shopping for pipeline gasoline from Russia, the CEO of Austrian power firm OMV has mentioned.
Alfred Stern made the remarks on Friday in an interview with Austrian each day Der Customary, on the sidelines of the World Financial Discussion board in Davos, Switzerland.
“For the primary time in over 60 years, we not have any Russian gasoline contracts; different gasoline provide sources have change into necessary… Europe has change into way more depending on LNG provides,” he mentioned.
Stern famous that with 80% of the world’s power at present derived from fossil fuels, changing this dependency in a single day is “unattainable,” and transitioning away from it requires substantial innovation and funding.
Within the first half of 2024, Russia was the second largest provider of LNG to the European Union after the US, in accordance with information compiled by the Institute of Vitality Economics and Monetary Evaluation.
Imports of Russian LNG by EU member states at the moment are at an all-time excessive. Throughout the first 15 days of this yr, they bought 837,300 metric tons of the gas, in accordance with information from Kpler and a latest report by Politico.
When requested concerning the potential impression of US President Donald Trump’s anticipated oil and gasoline manufacturing increase, the OMV chief govt remarked that it might show to be “useful” for the EU. Stern argued that lifting restrictions on LNG liquefaction terminals within the US might result in better gas availability in the long run, providing alternatives for the European power market.
Following the escalation of the Ukraine battle in 2022 and the sabotage of the Nord Stream pipelines, the EU took measures to scale back its reliance on Russian fossil fuels. Most members voluntarily stopped importing Russian pipeline gasoline, however a number of proceed to purchase Russian LNG, which has solely been partially focused by sanctions.
In June, the EU focused Russian LNG for the primary time, banning re-loading operations, ship-to-ship transfers, and ship-to-shore transfers with the aim of re-exporting to 3rd international locations through the EU. The sanctions have a nine-month transition interval.
Stern warned that abandoning Russian gasoline was unattainable for Austria, and would have dire penalties for its financial system and power safety.
Austria till lately received two thirds of its gasoline from Russia through Ukraine, and OMV had a long-term provide contract with Moscow till 2040.
Nevertheless, on January 1 Kiev halted Russian pure gasoline transit by its territory to the EU, successfully reducing off the circulation to international locations together with Austria, Italy, and Slovakia. Ukraine has refused to increase the deal.
The lack of Russian gasoline might value the EU over €1 trillion within the long-run, in accordance with Kirill Dmitriev, chief govt of the Russian Direct Funding Fund.
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