An endless search maze: how Europe is looking for a replacement for Russian gas

Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to Baltnews on the real prospects for redirecting American LNG to the EU gas market.

Alexey Gromov recalled that most of the contracts for the supply of liquefied gas from the United States are either topping or free-on-board.

“The problem is that it is profitable for traders to sell liquefied gas today in the EU, and tomorrow in Asia. In 2021, we have already seen how China, South Korea, Taiwan and other countries of the “East” were ready to pay more for LNG than European Union: For Asia, the high cost of LNG is the norm, the economies of these countries are already accustomed to such conditions. That is why, as soon as large-scale preparations for the heating season begin in Japan and South Korea, and China will lift restrictions on some provinces (caused by the outbreak of COVID- 19), traders will once again send their tankers to Asia, not Europe,” Gromov said.

"In this case, the EU will be saved only by long-term contracts for the purchase of LNG from the United States. Work is underway in this direction. I think that these 15 billion cubic meters, which are being discussed in Brussels and Washington, will just become the volume that Europe new agreements," he added.