Courtesy of Mish.
US sanction proposals against Russia coupled with immediate Russian counter-threats against European interests led to an easily predictable result: natural gas hoarding.
Bloomberg reports Europe’s Russia Gas Imports Jump to 3-Week High as Buyers Hoard.
European utilities boosted imports of natural gas from Russia to the highest level in three weeks even as storage remains at record-high levels amid the mildest winter since 2007.
Russia shipped 493 million cubic meters of gas to Europe, excluding the Baltic States, on March 3, the highest level since Feb. 10, Energy Ministry data show. Storage sites in the region are 47 percent full, 12 percentage points above the same time last year and the highest since at least 2008, according to Gas Infrastructure Europe, the Brussels-based lobby group.
U.K. gas prices jumped the most in 29 months on March 3 as Russia took control of the Crimean peninsula in Ukraine, which transits about 15 percent of Europe’s use, before paring gains the next day after President Vladimir Putin said there was no immediate need for military action. Bulgaria and Serbia, which suffered shortages in the past decade amid disputes between Russia and Ukraine, are pumping gas into storage.
LNG Demand
Russia’s intervention in Ukraine will boost LNG demand from European countries eager to diversify supplies, according to Sveinung Stoehle, the Chief Executive Officer of Hoegh LNG Holdings Ltd., which will deliver the first LNG import terminal in the former Soviet Union to Lithuania in August.
The U.S. will begin LNG exports next year from Cheniere Energy Inc. (LNG)’s Sabine Pass facility in Louisiana, the first of six Energy Department approvals since 2010. There are at least 24 more projects pending clearance. The U.S. should “dramatically” expedite the approval of its gas exports to global markets, House Speaker John Boehner, an Ohio Republican, said March 4.
Boehner vs. McCain
In regards to Senator John McCain’s proposal to sanction Russia and place missiles in the Czech Republic as the solution to the Ukraine crisis, I suggest that Speaker Boehner is thinking clearly but McCain isn’t.
Please see Russia Has Upper Hand in Ukraine for discussion.
LNG the Solution
If natural gas is a huge problem (and it is), then additional supply from other sources, not counterproductive sanctions is the solution….
