US, European Union strike LNG deal to undercut Russian energy

The United States will work to supply 15 billion cubic metres of liquefied natural gas (LNG) to the European Union this year to help it wean off Russian energy supplies, the transatlantic partners said on Friday.
 
The EU is aiming to cut its dependency on Russian gas by two-thirds this year and end all Russian fossil fuel imports by 2027 due to Russia’s invasion of Ukraine. Russia supplies around 40 per cent of Europe’s gas needs.
 
Concerns over security of supply were reinforced this week after Russia ordered the switch of gas contract payments to roubles, raising the risk of a supply squeeze and even higher prices.
 
Russia warned the West on Friday that billing in roubles for billions of dollars of natural gas exports to Europe could be just days away and ordered Gazprom to work out how the payments can be made within four days.
 
Senior US administration officials did not specify what amount or percentage of the extra LNG supply would come from the US.
 
US LNG plants are producing at full capacity and analysts say most of any additional US gas sent to Europe would have to come from exports that would have gone elsewhere. “It normally takes two to three years to build a new production facility, so this deal may be more about the re-direction of existing supplies than new capacity,” said Alex Froley, gas and LNG analyst at ICIS.
 
LNG under contract cannot be easily redirected. Already high European gas prices would have to rise further to attract those cargoes to the 27-nation bloc, analysts said.
 
Even if the 15 bcm is achievable, “it still falls well short of replacing Russian gas imports, which amounted to around 155 bcm in 2021,” analysts at ING Bank said.
 
US President Joe Biden and European Commission President Ursula von der Leyen also announced a plan to form a task force to cut Europe’s reliance on Russian fossil fuels.              

 

Sinopec Halts  Russia plans amid fear of Sanctions

 

China's state-run Sinopec Group has suspended talks for a major petrochemical investment and a gas marketing venture in Russia, sources told Reuters, heeding a government call for caution as sanctions mount over the invasion of Ukraine.

 

This hits the brakes on a potentially half-billion-dollar investment.
 

 

HSBC steps up scrutiny of Russia Clients

 

HSBC is shunning prospective Russian clients and declining credit to some existing ones, two sources  told Reuters, as the bank seeks to shield itself from Western sanctions against Moscow. This affects HSBC’s individual and business customers and goes further than its stated intentions to curb ties with lenders such as VTB
 

 

Russia shrugs off threat of G20 expulsion

 

The Kremlin said nothing terrible will happen if the US and its allies succeed in expelling Russia from the G20 economies because many of the G20's members are at economic war with Moscow anyway. Kremlin spokesman Dmitry Peskov said some countries were taking a sober approach towards Russia and not burning bridges