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rfmcdonaldDaniel Wagner, Giorgio Cafiero, and Sufyan bin Uzayr have an op-ed at the Inter Press Service noting the ways that, after the Ukrainian crisis, the Middle East natural gas-exporting state of Qatar can and cannot supplement Russia as a source.
In 2013, the EU and Russia began construction on the South St[r]eam 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 jeopardise 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.
[. . .]
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.
Although Poland relies on Russia for 60 percent of its natural gas imports, Warsaw has pursued bold measures to purchase gas from other providers (including Qatar) since the Russia-Ukraine price war of 2009, which highlighted the geopolitical risks of maintaining a reliance on Russian gas.
Poland’s LNG terminal in Świnoujście is expected to begin importing Qatari gas in 2015. As Eastern European countries, including Estonia and Lithuania, also invest heavily in LNG infrastructure, Qatar will likely gain new opportunities given Doha’s ownership of Qatargas, the world’s largest LNG shipping company.
[. . .]
Due to Russia’s enormous market share in Europe, it can sell natural gas to the Europeans at a price 40-50 percent below what the Qataris offer. Nearly 70 percent of Qatar’s exports reach China, India, Japan, Singapore, and South Korea, making Qatar’s economy far less dependent on EU-bound exports.
Therefore, Russia will likely sign gas deals with Europe at rates below any level that the Qataris would find agreeable given their opportunities in Asian markets. While Polish officials are willing to pay a steep price to wean their country off Russian gas, other European governments will not have the ability or incentive to do so.
