Head of Research
VYGON Consulting Head of Research Maria Belova made a speech at the session "World Energy Market. New Vectors and Prospects for Development", which takes place as part of the IX International Forum "Energy Security and Development Prospects" within the framework of the VII St. Petersburg International Gas Forum on October 3-6, 2017.
The event was also attended by the Head of Norwegian consulting company Sund Energy AS Karen Sund and the Adviser to the General Director of LLC Gazprom Export Andrey Konoplyanik. Director of the Gas Logistics Division of OMV Gas & Power GmbH Michael Voltran held the discussion.
Karen Sund set the tone of the discussion with her speech on the competition for pipeline gas and LNG supplies to Europe. She noted that traditional suppliers of gas in the EU "need to wake up and act" by changing their established approaches to gas sales. "They are less inventive than gas buyers and their RES competitors," Sund stated.
In answering the question formulated in the title of her report "American LNG: game changer or successful marketing move?", Maria Belova noted that with the beginning of the US liquefied gas exports, the revolution on the global market did not occur. Almost 90% of the US gas is sold under long-term contracts that, as is the case with Russian gas, essentially include the "take-or-pay" clause: regardless of gas withdrawal volume, the LNG buyer on FOB terms must pay for the previously agreed capacity lease for its liquefaction at the plant.
And despite the massive advertising campaign that accompanied the commencement of US gas supplies, as part of which the country's top officials stated that every European country could start buying American gas, in fact the EU is the least popular market for LNG exporters from the US. "For the entire time of the Sabine Pass plant operations, it accounted for only 13% of shipments. And given the fact that on average for 2016 supplies of American gas in this direction were unprofitable, it did not become a real alternative for Europe to Gazprom's pipeline supplies, the expert noted.
Continuing the topic of American LNG in his report on the analysis of evolution of European gas legislation, Andrey Konoplyanik admitted that its further changes discussed today could be dictated by the desire of the US administration to artificially increase the competitiveness of its gas on the European market. "Through the creation of additional barriers for Russian gas on the EU market, gas prices for end consumers will grow, which will increase the attractiveness of this market for US LNG suppliers," the representative of LLC Gazprom Export commented.