BEIJING, Sep 3 – PRIME. The US has been the biggest beneficiary of the Ukraine crisis and Europe’s energy woes, opening up a huge market for US gas suppliers, tightening control over Europe and hurting an important component of Russian exports, China’s state-run Global Times reported on Saturday.
Lin Boqiang, director of the China Energy Economics Research Center at Xiamen University, told the Global Times on Saturday that at a time when Russian pipeline gas supplies were in free fall, the EU had no choice but to ramp up imports from the US at any cost, which brought unprecedented profits to American gas suppliers. “This would have been unthinkable in the past as U.S. LNG prices are clearly much higher than Russian pipeline gas prices due to transportation costs, but now the Ukraine crisis has made it a reality as the EU is determined to reduce its energy dependence on Russian gas. “, said the analyst.
In other words, he added, “the global energy landscape is undergoing a significant restructuring due to geopolitical factors, accompanied by a sharp rise in prices and supply shortages.” In his opinion, energy prices will remain high until the completion of the restructuring, which will put additional pressure on the global economic recovery. “Even with expensive US LNG imports from the EU, it can still be difficult to avoid a sharp rise in inflation, power shortages and production disruptions this winter, when energy demand usually rises sharply,” said Lin Boqiang.
Another expert, who spoke on condition of anonymity, told the newspaper that “the US appeared to be the biggest beneficiary of the energy crisis by opening up a huge market for US gas suppliers, tightening control over Europe and hurting a key Russian export.” “The EU needs more time to prepare to reduce its dependence on Russian gas, which includes, among other things, an increase in the number of LNG carriers and an increase in the number of gas storage facilities,” the expert said.
The publication writes that global LNG traders have placed a significant number of orders for LNG carriers, with Chinese and South Korean shipyards receiving a record number of orders. For example, an expert at Shanghai-based Hudong-Zhonghua Shipbuilding, on condition of anonymity, told the Global Times that the company has received orders for LNG carriers this year equivalent to the total number of orders over the past 20 years.
“Even with enough LNG carriers, the EU may still face a shortage of receiving and storage terminals, which can take years to build. To reduce construction time, Germany is converting LNG carriers into floating LNG regasification units, but it will be difficult to complete the work by this winter,” said an expert from Hudong-Zhonghua Shipbuilding.
Nord Stream has been operating with restrictions since mid-June, and since the end of July, it has been operating at only 20% of its nearly 170 million cubic meters of capacity per day. The Russian side emphasized that the decrease in supplies was due solely to sanctions, which caused problems with the maintenance and repair of Siemens gas pumping units. Recently, only one turbine provided work.
Gazprom announced the day before that Nord Stream, which had been previously stopped for three days for scheduled maintenance, could not resume operation due to an oil leak at the only running Trent 60 unit. A representative of the German Siemens Energy told RIA Novosti that the company does not consider the conclusion Gazprom’s technical reason for stopping the pipeline. Global Times emphasizes that the European Union, amid fears of an indefinite halt in Russian gas supplies via the Nord Stream gas pipeline, will be forced to increase imports of liquefied natural gas from alternative sources ahead of winter, which will make the United States clearly the biggest winner of the Russian-Ukrainian crisis. The newspaper notes that the shift in European demand from Russian pipeline gas to LNG has already led to a sharp increase in orders for LNG tankers, and, accordingly, to the placement of a record number of orders this year.