[Vincent Milner]

European Union leaders want to reduce reliance on Russian natural gas as they seek to punish Russia for its annexation of Crimea.

The EU’s energy dependency rate is set to rise to 80 percent by 2035 from the current 60 percent, according to the International Energy Agency. Gas from Russia accounted for almost 32 percent and oil for about 35 percent of the bloc’s imports in 2010, according to EU data. DETAILS

[Tanada]

Plans are great, after all without plans you never know if you are achieving your goals. Unfortunately in an energy constrained world this plan is next to impossible to achieve. If you are going to reduce imports from one place you either have to increase imports from somewhere else or cut energy usage.

[Vincent Milner]

I totally agree with you and I guess the EU does too, as they are in the process of a gas link deal to ship gas from Slovakia to Ukraine.

It has already established reverse-flow pipelines to pump gas east as well as west through Hungary and Poland, but the more important link is the Slovakian pipeline, which is said to have the potential to pump up to 10 billion cubic metres per year.

Found this info HERE

Doubt how much deficit EU can cover with this deal.

[Subjectivist]

I totally agree with you and I guess the EU does too, as they are in the process of a gas link deal to ship gas from Slovakia to Ukraine.

It has already established reverse-flow pipelines to pump gas east as well as west through Hungary and Poland, but the more important link is the Slovakian pipeline, which is said to have the potential to pump up to 10 billion cubic metres per year.

Found this info HERE

Doubt how much deficit EU can cover with this deal.

Why do you have to modify a gas pipeline to run it backwards? I thought it would be like a water pipeline, you pressurize it and the fluid flows naturally from high pressure to low pressure?

[Strummer]

The modifications for the reverse flow are completed, just a metering station at the Velke Kapusany interconnector on the Slovak-Ukraine border needs to be modified. The problem is that the Slovak company Eustream and the Slovak government are reluctant to greenlight the thing, because it's not clear how Ukraine will pay for the gas. They didn't pay Gazprom, where is the guarantee that they will pay for the gas from the West? Especially in the current situation, with the country bankrupt, falling apart and ruled by a illegitimate government.

[Subjectivist]

That's a good question, Sub. But the Ruskies already pump in one direction, and so we'd need to pump harder in the other. The result is MAP (Mutually Assured Pressure) war. LOL

Maybe it has to do with feeder/distributing sub-pipelines and industrial end-use applications that require higher pressure?

Hey I asked first, no fair asking back!

[AndyA]

Russia is close, less transport = cheaper. To get a gas pipeline from Qatar they need to get Syria sorted, which isn't going to plan in fact the plan has backfired pushing Syria closer to Russia. So until that gets sorted it's going to be LNG which isn't cheap. Rising energy costs would hit the EU pretty hard, right where it hurts. The worst part is that most Germans have no problems with the way Russia has handled Crimea.

[ROCKMAN]

Perhaps one more reason to not expect North American LNG to help out our EU cousins: Former China Oil Tycoon Plots Return with Canadian Gas Venture

From Rig Zone: http://www.downstreamtoday.com/news/art ... a_id=42629

Reuters - A Chinese oil tycoon, Gong Jialong, who lost his fortune after being jailed for embezzlement in 2007, aims to make his comeback with an ambitious project in Canada to export gas back to his homeland. Gong invested in two small oil and gas producers in Alberta, Canada, and has set up a firm to build a LNG plant in Stewart, a tiny port on British Columbia's northwest coast. Canada Stewart Energy Group Ltd, set up with a local partner, applied to Canadian regulators on March 5 for a license to export 30 million tonnes of gas a year, the biggest quota applied for by any firm so far.

Canada's National Energy Board has so far approved seven LNG export projects along its Pacific coast and is reviewing four others including the Stewart proposal. It aims to start gas exports from a floating facility with an annual capacity of 5 million tonnes in 2017, before increasing to a full capacity of 30 million tonnes (4 billion cubic feet per day) by 2025, the firm said in its application posted on a government website.

[Plantagenet]

All the more reason for Europe to get busy drilling and fracking.



The French can show the way by repurposing the Eifel Tower as a drill rig.

That way they will look magnifique wherever they spud in.

[kiwichick]

they could also increase renewables

geothermal and wave could provide more baseload

an australian company has just been given permission to develop geothermal in Hungary

[alokin]

Germany wants to get rid of nuclear power.
And as mentioned above, at least according to the comments in Spiegel, Germans are not happy with the way the West meddles in Ukraine. I cannot see major fracking projects going on in Germany without huge protests.

[Plantagenet]

I cannot see major fracking projects going on in Germany without huge protests.

I can't see Russia cutting off natural gas to Germany without huge protests.

But if Germany and the EU don't want to be overly dependent on Russian NG, then they don't have much choice but to either develop their own NG by fracking, or put much much more money into nukes, solar, wind, wave and other renewables, or other power sources to replace Russian NG.

[ROCKMAN]

"...either develop their own NG by fracking, or put much much more money into nukes, solar, wind, wave and other renewables, or other power sources to replace Russian NG." And IMHO if the EU put 110% of the effort into it starting tomorrow the situation would hardly change in even 5 years. The problem for the EU is what's going on now. From an energy security standpoint they have nothing else to depend upon other then Russia's dependency upon export revenue.. The cards have been dealt and talking about changing them won't make it happen. Russia and the EU are going to come to terms with the current situation IMHO because neither has much choice at the moment...or for many years to come.

[ROCKMAN]

Reuters – Novatek sees no impact of U.S. sanctions on a co-owner on the progress of the Yamal LNG project, the chief executive of the second-largest Russian gas producer said on Wednesday. Leonid Mikhelson, chief executive and co-owner of Novatek, also said the company's gas production will rise by 7 percent this year from last year's 62 billion cubic metres. "I do not see any potential impact on Yamal LNG," Mikhelson told media, when asked if he sees the sanctions hurting the progress of the project. The independent gas producer is part-owned by billionaire Gennady Timchenko, who has been sanctioned as an ally of Russian President Vladimir Putin over Russia's annexation of Crimea. Novatek has been developing the Yamal LNG project, together with partners Total and China's CNPC. The first production unit, with annual capacity of 5.5 million tonnes, is due to be launched in 2017.

And here for those not familiar with the Yamal project. BTW Germany is about half the distance from Yamal as the east coast of China. So one EU partner and one Asia partner in the project. The Yamal LNG project is based in the estuary of the Ob River which is ice-bound nine months of the year. The project ensures production and marketing of the Russian Arctic’s vast natural gas reserves and has involved the construction of a major new maritime route for transporting liquefied natural gas to Europe and Asia.

The Yamal LNG project is one of the largest industrial undertakings in the Arctic. It will eventually involve the drilling of more than 200 wells, the construction of 3 LNG trains, each with a capacity of 5.5 million tons per year, and a vast gas terminal, and the commissioning (a world first) of 16 icebreaker tankers, each able to transport 170,000 m³. This ground-breaking project will develop the huge South Tambey condensate gas field. Total is leading the project as part of a strategic alliance with Novatek, Russia’s second-largest independent natural gas producer.

[Plantagenet]

". The problem for the EU is what's going on now.

Thats inherent in every problem.

The solution for every problem is the same too----you have to take steps to improve the situation. If the EU wants to cut its NG reliance of Russia, then it will have to invest in alternatives to Russian NG.

Its not like this is a big surprise---the EU was told 20 years ago that they would be foolish to make themselves energy dependent on Russia.

[ROCKMAN]

Interesting story. At first I thought it was about freeing themselves from Russian NG. Actually it’s about freeing themselves from depending upon the Ukraine to transship the Russian NG to them. They see the Ukraine as their Achilles Heel…not Russia.

Reuters - Hungary and Slovakia linked their natural gas pipeline networks on Thursday as part of European Union efforts to strengthen supply security in a region of the bloc that relies heavily on imports from Russia. The connection will allow flows to be reversed so that Hungary, rather than import gas from Russia, can bring it from alternative sources in Europe. A new pipeline with annual capacity of about 5 bcm is due to become operational from 2015.

Hungary imports about 80 percent of its gas from Russia and the Hungary-Slovak interconnector is part of the North-South Corridor, an EU project aimed at reducing dependence on eastern imports. "This pipeline creates the opportunity for us to import gas from outside Russia in future," Hungary's Prime Minister Orban told a news conference. Eustream said the interconnector would in future give Slovakia access to a LNG import terminal in Croatia.

Building new links and upgrading infrastructure gained renewed focus in the EU following a contract dispute between Moscow and Kiev in 2009 that stopped gas flows via Ukraine to much of central and southeastern Europe in the middle of winter. Central and eastern European countries including the Czech Republic, Slovakia, Poland and Austria have all made recent strides to build new gas links with each other. For now, the chief supply security advantage is that the completed section of the future corridor will allow Russian gas to be imported via different routes as it cannot, as yet, be used to link to alternative suppliers.

"The security aspect is the most important, as this pipeline gives additional access to Russian gas," said Pletser, analyst at Erste Bank in Budapest. "At this moment, it does not lead to diversification of our imports." However, a Polish-Slovak link with a capacity of up to 5 billion bcm per year will be completed in 2017 as part of an eventual proposed pipeline stretching from northern Poland to Croatia. This would access supply both from Poland's new LNG terminal on the Baltic and the planned LNG terminal on Croatia's island of Krk.

[ROCKMAN]

Another potential source of NG for the EU. But an expensive one: LNG shipped thru Spain. I can see why Spain is pushing the idea: they’ve invested many $billions in LNG import facilities which must be very underutilized given their economic condition. IOW they aren't going to gasify the LNG for the EU for free.

Reuters - Spain's sophisticated gas infrastructure could help Europe reduce its dependence on Russian supplies once projects to pump gas across the Pyrenees become a reality. Europe's most highly diversified gas importer has vast untapped import capacity which it could use to route gas into France and beyond, but underdeveloped pipeline links with other countries have effectively made Spain a gas island.

Spain has one of the safest and most diversified gas systems in Europe. Spain does not receive any of its natural gas from Russia. About half of its gas comes from Algeria and the remainder from ten different countries around the world, mainly in the form of LNG. Spain spent billions of euros on its gas infrastructure during an economic boom and with seven LNG regasification plants has more capacity to turn LNG back into gas than any other European country.

Now it is lobbying the EU to forge ahead with plans for a new pipeline, called MIDCAT, to transport gas into Europe. MIDCAT, which is currently on the European Commission's list of strategically important projects, would put Spain's interconnection capacity with France at 14 billion cubic metres. With this pipeline Spain could replace 10 percent of what Europe currently receives from Russia. Right now there is only one gas pipeline between Spain and France, called Larrau, which can transport 5.2 bcm, a fraction of the 462 bcm of gas consumed by the EU last year. A new pipeline called Biriatou, running from Spain's Basque Country into France could add another 2 bcm of interconnection capacity when it is completed in 2015.

Following recent tensions in Ukraine, the EU has asked the United States to start exporting its natural gas, but U.S. President Barack Obama on Wednesday linked any export deal to a new transatlantic trade agreement and said the EU cannot rely solely on the U.S. to cut its dependency on Russian energy. {especially since the US is a net NG importer. LOL}

[ROCKMAN]

And plans to enhance access to Russian NG. At first the title seemed to imply an effort to escape the grasp of Russia. Turns out this will be an alternate method of getting Russian NG without depending upon the Ukraine. Despite rhetoric to the otherwise there are efforts to isolate Poland and other EU countries from the Ukraine with respect to NG supplies.

Poland Opens Gas Link to Draw Reverse Flows from Germany - Reuters - Poland opened its first gas link from the West on Tuesday capable of transporting supplies from Germany to help guard against potential cuts of Russian deliveries, Poland's gas operator Gaz-System said. (Which seems to be an odd and misleading statement at first given this is a link to the Russian Yamal NG pipeline}

The reverse flow link along the Yamal pipeline (a 4,000 kilometre long pipeline carries supplies from Russian gas fields) through a pumping station in the German town of Mallnow is also part of wider European Union efforts to build new links and infrastructure to ensure security of supply. "Gas transmission operator is starting the provision of reverse transmission services on a permanent basis on the Yamal gas pipeline," the gas operator said in a statement. "Investment in the connection of the Polish section of the Yamal pipeline and the transmission system belonging to the German operator has fundamental importance for improving the transmission capacities between Poland and Germany."

Central and eastern European countries including the Czech Republic, Slovakia, Hungary and Austria have all made recent strides to build new gas links with each other and to improve reverse flows. Building new links and upgrading infrastructure to enable reverse flows has gained renewed focus in the EU following a contract dispute between Moscow and Kiev in 2009 that stopped gas flows via Ukraine to much of central and southeastern Europe in the middle of winter.

[ROCKMAN]

And Russia has plans to cut its reliance on EU NG buyers: Arctic Gas Project Backs Political Strategy as Russia Turns to the East

Reuters - On the Arctic tundra far to the north of Moscow, Russia is charting a course away from the West and towards Asia. In Yamal a $27 billion LNG scheme is assuming major political as well as economic significance. The project fits well with a more aggressive eastward push by Moscow since the United States and European Union imposed sanctions over its annexation of Crimea from Ukraine last month. Instead of sending gas by pipeline to long-standing EU customers, Russia aims to ship LNG from the remote Yamal peninsula by sea largely to Asian buyers such as China.

Yamal will eventually involve the drilling of more than 200 wells and building facilities to liquefy the gas. Construction at the port of Sabetta, more than 1,200 miles north of Moscow, is well under way. “The port and the plant are under the protection of the president and government," said Voronkin, deputy head of Yamal LNG. Voronkin noted that French energy group Total and China National Petroleum Corp each have 20 percent stakes in Yamal LNG. Russia's reserves of Arctic gas are estimated at more than 30 trillion cubic metres and it hopes to convert a quarter of this into LNG, under a long-term plan to diversify away from the European market.

With the EU and Ukraine discussing ways to cut their reliance on Russian gas, Moscow has courted its Asian partners more aggressively, hoping to capitalize on record prices for LNG in Japan, China and South Korea. Putin has hailed the Yamal LNG project and wants no expense spared. Russia now has just one LNG plant, controlled by state-run top gas producer Gazprom, on the Pacific island of Sakhalin with an annual capacity of 10 million tonnes. A deal between Gazprom and China has been in the works for at least 10 years. If one is finally struck, Putin could hold this up as proof that Western attempts to isolate Russia are destined to fail.

At Sabetta, a site worker who gave his name only as Viktor said U.S. threats would not stop or slow the project. "Do you think the government's seats are taken by fools, not knowing what to do? Do you know how interested Putin is in this project?" said Viktor, who is helping to build orange and blue pre-fabricated accommodation for thousands of workers due to move to Sabetta for at least some months of the year. "Whatever the U.S. might say, all will be in place here," he said, showing newly painted rooms. More than 10,000 people will eventually work at the project, producing 16.5 million tonnes of super-cooled gas by the end of this decade - enough to supply the world's fastest-growing energy consumer, China, for around a year. Russia plans to double that over the next decade as additional fields start production.