Russia's grasp on EU gas tightens despite Trump slating Germany
US President Donald Trump eased his tone about a Russian natural gas pipeline to Germany after a one-on-one meeting with President Vladimir Putin, shifting from the harsh criticism of Germany he'd levied in Europe last week.
"We are going to be selling LNG and will have to be competing with the pipeline and I think we'll compete successfully, although there is a little advantage locationally" because Russia is closer to buyers in Europe, Mr Trump told reporters at a news conference with Mr Putin after their meeting in Helsinki on Monday.
"I'm not sure necessarily that it's in the best interest of Germany or not, but that was the decision that they made."
The Nord Stream 2 pipeline, which would double Russia's capacity to deliver natural gas direct to Germany under the Baltic Sea and circumvent Ukraine, a major supply route to the European Union, has been a sore point between the US and its allies over the past months. Last week, Mr Trump slammed what he called German dependence on Russian energy, saying it made the nation "captive" to Moscow.
The Kremlin said Mr Trump's attacks were economically motivated and an attempt to promote US liquefied natural gas in Europe.
Mr Trump last year signed a law giving him the right to impose sanctions on companies involved in the Nord Stream 2 pipeline project. Royal Dutch Shell, BASF's Wintershall unit, Uniper, OMV and Engie have agreed to provide Russia's Gazprom with financing for the €9.5bn pipeline and could be at risk of penalties.
"I called him a competitor and a good competitor he is," Mr Trump said of Mr Putin on Monday. "I think the word 'competitor' is a compliment."
Mr Putin said he sees space for cooperation with the US on energy, while saying Russia may be willing to extend gas transit accords with Ukraine if the two nations' state companies can resolve legal disputes about fees and pricing.
Europe is poised to become more reliant on gas imports as output from the Groningen field in the Netherlands, the continent's largest, winds down.
The continent must "establish very, very solid relationships" with any countries that can provide gas at an affordable price with the appropriate services and "without any political strings attached," Maros Sefcovic, vice-president of the European Commission's Energy Union, said at the World Gas Conference in Washington last month.
But Europe may have difficulty attracting gas cargoes from overseas, given higher prices in Asia. Gazprom is Europe's largest gas supplier and provides more than a third of the region's needs in the fuel. Its chief executive officer, Alexey Miller, confirmed in June it plans to start laying the pipes in the next couple of months and to open the Nord Stream 2 link by late-2019. The project would cut Russia's need to cross Ukraine.
Gazprom's Alexey Miller is unperturbed by the prospect of American LNG supplies to Europe. They "will never catch up with and will never surpass" Russian gas exports to the region, Mr Miller said in June.
Meanwhile, a US move to clamp down on Iranian fuel supplies, including to Europe, could see Iran's oil exports fall as much as two-thirds by the end of the year.
Europe accounted for the biggest chunk of Iran's oil exports in the first half of the year, with Italy and Turkey the top importers. Several refiners already stopped their purchases of Iranian crude after Swiss lender Banque de Commerce et de Placements said it would stop financing Iranian cargoes by June 30.
(Bloomberg / Reuters)