Financial Analyst to QNA: Europe Seeks to Change its Gas Supplies Map

 

 

Doha, February 23 (QNA) - After a year of the Russian-Ukrainian war, the international gas supplies map, especially in Europe, has seen a significant change and a race against time to meet the consumers' demand for natural gas in Europe, especially during winter, which sees a higher demand on this vital product, which made it the main concern for European decision-makers to look for alternatives for pipelines that can transport gas from the east to the west.

    In this regard, financial analyst Jaber Bin Ali Al Hedfa told Qatar News Agency (QNA) that Europe managed to obtain different oil and gas supply routes other than those coming from Russia. He added that talking about the total dispense of Russian gas supplies is not possible, as this transformation requires more time to build the needed infrastructure.

    Officials at the European energy commission revealed that there are plans to replace the Russian gas with other resources as work is underway with other natural gas suppliers to address the gas crisis. According to the commission's plans, as announced by energy officials, Europe plans to increase liquefied natural gas (LNG) imports from different suppliers and to generate electricity using solar power and other resources, equal to consuming 102 billion m3.

    According to the Brussels-based Bruegel institute for studies, the EU countries are heading toward dispensing Russian gas quicker than expected. According to a study made by the Bruegel institute, Europe substituted its Russian gas supply gap through LNG imports from new suppliers and generating electricity by coal and other energy generation sources.

    Regarding the repercussions of the European approach, Al Hedfa said that the cost of changing the supply map began to be seen from a number of European economies losing their competitiveness as a result of the high production costs associated with the high oil and gas bill and thus their ability to market their products locally and internationally. On the other hand, Russia lost a large market, as the European energy commission reports confirmed that EU countries managed to find alternatives in LNG, while Russia could not find new markets for its gas until now as its exports to the Chinese market reached only 10.8 billion m3 so far, while its exports to the European market used to be around 155 billion m3 annually.

    Meanwhile, the financial analyst pointed out that replacing the Russian gas needs some time to reach pre-war levels. The associate of the Davis Center for Russian and Eurasian Studies at Harvard University Margarita Balmaceda said that natural gas pipeline projects require huge funds and investments and take a very long time. Thus, Russia has no available option to compensate for losing the Europe gas market and finding alternative markets in the short term. Also, according to the German Federal Ministry for Economic Affairs and Climate Action, Germany needs three more years to build the required storage capacity for LNG to reach Russian gas levels in 2021. (QNA)