Exclusive: US talks with energy companies about EU gas supplies in case of Russia-Ukraine conflict

Flames from a gas burner on a stove are seen February 1, 2017 in this illustrative photo taken at a private home in Nice, France. Picture taken February 1, 2017. REUTERS/Eric Gaillard

Join now for FREE unlimited access to Reuters.com

Register

LONDON/WASHINGTON, Jan 14 (Reuters) – The U.S. government has held talks with several international energy companies on contingency plans for Europe’s natural gas supplies if the conflict between Russia and Ukraine disrupts Russian supply, two U.S. officials and two industry sources told Reuters on Friday. .

The United States fears Russia is preparing for the possibility of another military assault on the country it invaded in 2014. Russia denies plans to attack Ukraine. Read more

The European Union depends on Russia for about a third of its gas supplies, and US sanctions in the event of a conflict could disrupt this supply.

Join now for FREE unlimited access to Reuters.com

Register

Any disruption in Russia’s gas supply to Europe would exacerbate an energy crisis caused by a fuel shortage. Record electricity prices have pushed up consumer energy bills as well as business costs and sparked protests in some countries.

State Department officials approached the companies to ask where additional supplies could come from if they were needed, two industry sources familiar with the discussions told Reuters, speaking on condition of anonymity. due to the sensitivity of the issue.

The companies told US government officials that global gas supplies were tight and there was little gas available to replace large volumes from Russia, the industry sources said.

The State Department’s talks with energy companies were led by senior energy security adviser Amos Hochstein, a senior US State Department official said, also speaking on condition of anonymity. The State Department has not asked companies to increase production, the official added.

“We have discussed a range of contingencies and talked about everything we are doing with our nation state partners and allies,” the source said.

“We have done it with the European Commission, but we have also done it with energy companies. It is correct to say that we have spoken to them about our concerns and have spoken to them about a series of eventualities, but it there wasn’t any kind of issue when it comes to production.”

In addition to asking the companies about their ability to source supplies, US officials also asked if the companies had the capacity to increase exports and postpone field maintenance if needed, the sources said.

It is unclear which companies US officials have contacted. Royal Dutch Shell (RDSa.L), ConocoPhillips and Exxon (XOM.N) declined to comment when asked if they had been contacted. Chevron Corp (CVX.N), Total, Equinor (EQNR.OL) and Qatar Energy did not immediately respond to a request for comment.

A second industry source said his company was asked if it had the ability to postpone gas field maintenance if needed.

A spokesman for the US National Security Council would not comment on US talks with energy companies, but confirmed contingency planning was underway.

“Assessing potential fallout and exploring ways to reduce that fallout is good governance and common practice,” the spokesperson said.

“Any details in this regard that come to the public only demonstrate the detail and seriousness with which we are discussing and ready to impose significant measures with our allies and partners.”

Moscow has alarmed the West by massing troops near Ukraine in the past two months, following its capture of Ukraine’s Crimean peninsula in 2014 and backing separatists fighting Kiev troops in eastern Ukraine.

Biden previously told Russian President Vladimir Putin that a new Russian move on Ukraine would lead to sanctions and an increased US presence in Europe.

Russia denies planning to attack Ukraine and says it has the right to move its troops on its own soil as it sees fit.

“The United States has promised to support Europe in the event of an energy shortage due to conflict or sanctions,” the second industry source said.

“Amos is going to see big LNG companies and countries like Qatar to see if they can help the United States,” he added, referring to Hochstein.

If gas pipeline supplies from Russia to Europe are reduced, European buyers should look for superchilled gas shipments to compensate.

US exports of liquefied natural gas (LNG) are expected to soar this year to make it the world’s largest supplier of LNG. Europe competes for LNG supplies from suppliers such as the United States and Qatar with major consumers China and Japan, which are also facing an energy crisis.

Join now for FREE unlimited access to Reuters.com

Register

Additional reporting by Jarrett Renshaw, Michelle Nichols and Gary McWilliams; Editing by Richard Valdmanis, Simon Webb and Daniel Wallis

Our standards: The Thomson Reuters Trust Principles.

Comments are closed.