Russian LNG Is About To Transform European Gas Markets
By David Woroniuk.Oilprice – Mar 05, 2019, 11:00 AM CSTJoin Our Community
Russia has long been established as a crucial component of most European natural gas import portfolios, with most imports received via pipeline through the Yamal-EuroPol pipeline (Poland) or the Baumgarten gas hub (Austria).
However, in the month of February, Russian LNG flows played a pivotal role in price formation within Europe. Many analysts have attributed the increased dependence on Russian LNG imports to the combined factors of weak Asian demand, driven by unseasonably warm winter temperatures, and the earlier-than-anticipated start of the Yamal LNG project. This article reviews whether this is an anomaly, or, if it is the ‘new normal’, and the potential ramifications for European natural gas security.
However, even in April 2020, it will be difficult to gain a comprehensive understanding of the identity of the Yamal cargo end-users. This is due to the majority of Yamal’s contract counterparties simultaneously operating across numerous supply contracts and short-term gas and LNG markets, enabling them to choose the most profitable end destination from within their portfolio.