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     Apr 28, '14

Qatar LNG in wing to supply Europe
By Daniel Wagner, Giorgio Cafiero, and Sufyan bin Uzayr

WASHINGTON - Throughout the Ukraine crisis, European Union (EU) leaders have become more vocal about their interest in reducing Europe's consumption of Russian natural gas. As a result, Qatar - the world's number-one provider of liquefied natural gas (LNG) - is well positioned to play a more influential role in Europe's energy landscape.

Although unlikely to replace Russia as Europe's top natural gas

provider, Qatar could assist in significantly decreasing the EU's reliance on Russian energy resources while at the same time obtaining greater diplomatic leverage over European governments.

Fortunately for the EU, Ukraine's crisis did not erupt several years earlier. In 2006, 80% of Russia's natural gas sales to the EU transited Ukraine. This was reduced to 50% by 2013 (two years after the Nord Stream pipeline came on line - connecting Vyborg, Russia to Sassnitz, Germany via the Baltic Sea).

In 2013, the EU and Russia began construction on the South Steam project, a planned gas pipeline connecting Russia to Bulgaria via the Black Sea, which would increase EU-Russia energy trade while bypassing Ukraine.

However, the chilling of EU-Russia relations may jeopardize the South Stream project's future. European firms involved in the project have reacted differently. While the CEO of Italy's ENI called the project's future "gloomy," some Bulgarian and German firms have remained optimistic, as have their Russian partners.

Naturally, each EU member faces unique geopolitical challenges and varying degrees of geographic proximity to alternative natural gas providers and corridors. National interest will therefore dictate how each participating European nation reacts to the project in the future.

Qatar's most promising near-term opportunities in the EU exist in Central/Eastern Europe, where dependency on Russian gas is comparatively high and anti-Kremlin sentiment is widespread. More ...

(Inter Press Service)




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