Is The EU Finally Breaking Free Of Russia’s Energy Grip?
Gazprom’s dominance over European energy supplies may be beginning to slip.
The collapse of oil prices has punished Gazprom’s revenues, but in a new development that is further damaging to the Russian state-owned company, the European Union is also beginning to shake itself of Russian gas.
Russian exports of natural gas through the Nord Stream pipeline – which runs from Russia to Germany across the Baltic Sea – have dropped by more than half in February from the same period last year, according to Reuters. Average daily deliveries have declined from 98 million cubic meters to 45 million cubic meters.
For 2014 on the whole, the European Union reduced Russian gas imports by 9 percent, the fourth consecutive year of declines.
There are several reasons for this. First, the European economy is growing slowly, if at all. That keeps a lid on natural gas consumption. Second, the 28-member bloc is actually making substantial progress on energy efficiency. Third, Europe has experienced a mild winter, lessening demand for natural gas supplies.
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But the EU is also finding other sources of energy. Last year Lithuania began importing liquefied natural gas (LNG) from Norway, a development that has diminished Gazprom’s grip over the small Baltic country. Lithuania has even been willing to pay a 10 percent premium for Norwegian gas – a rate that Lithuanian officials noted was still less than what they paid for Russian gas in the past. “From now until forever, our access to LNG puts a cap on what Gazprom can charge us,” Lithuania’s energy minister Rokas Masiulis said in a Reuters interview in November 2014.
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