Like it or not, Russian natural gas is here to stay – panel on European Energy Security

Fulcrium moderates Energy Security Panel at LBS Global Energy Summit 27 November 2014.

The LBS GES Energy Security panel addressed geo-political issues and challenges decision-makers face in the pursuit of European energy supply security in the wake of the Ukraine Crisis.  Bottom line:  The EU will remain dependent on Russian natural gas for decades to come irrespective of sanctions, source of supply diversification, and renewables agendas !  Likewise Moscow is dependent on the EU for 60% of Gazprom’s revenues.  Like it or not, the EU and Russia are highly co-dependent as far as Russian natural gas is concerned.

Days after this debate took place, Russian President Vladimir Putin shelved the $40bn South Stream project designed to bypass Ukraine as the key transit state for Russian gas to Europe.  And in a further twist, on 16 December 2014, German Chancellor Angela Merkel has urged Bulgaria to enter into dialogue with Moscow to revive the South Stream project.  Perhaps this is a signal of a softening EU stance in order to rebuild economic ties with Russia, more out of a necessity to safeguard Germany’s and Bulgaria’s interests.  Other countries which stood to gain from South Stream, including Serbia and Hungary, also want to rescue the project. Russia supplies about 25 percent of EU gas needs; half of that flows via Ukrainian transit pipelines.  The EU’s most powerful economy, Germany, is still highly dependent on Russian natural gas, importing 30% of it’s annual gas consumption from Russia.

Panel Chair: Raju Patel, Chief Executive, Fulcrium

Panellists:

Vladimir Drebentsov, Vice President, BP Russia / Head of Russia & CIS Economics, BP Plc

Dr Tatiana Mitrova, Head of Oil and Gas Department in the Energy Research Institute of the Russian Academy of Sciences (ERI RAS), Board Director – E.ON Russia

Andrew Risk, Senior Associate – Political Risk, GPW + Co

David Buchan, Senior Research Fellow, The Oxford Institute for Energy Studies

Keywords:

European Third Energy Package, N1 Standard, Gazprom, South Stream, BP plc, E.ON, Geo-politics, Ukraine, Russia, Moscow, London, Energy Security, Southern Corridor, Russian Sanctions, Transit Pipeline, LNG, LNG Import Terminal, Oil Price, Bulgaria, Hungary, European Commision, Germany, Lithuania LNG, Latvia, Slovakia, Estonia, Norway, Finland, Energy Diversification, Source of Supply, Foreign Policy, Natural Gas, Liquefied Natural Gas, Energy Policy Dilemma, Energy Trilemma, Algeria, North Africa Gas, Qatar, Statoil, Libya Gas, Egypt LNG, Reliable Transit, Reverse Gas Flows / Gazprom Destination Clauses