LNG & Interconnection: "Reinforcing Alliances"
The Nord Stream-2 project does not enjoy the support of the European Commission, says a former President of the European Parliament.
In his remarks at an event organized by Natural Gas Europe and Geopolitika on November 11 in the European Parliament in Brussels, Polish MEP Jerzy Buzek reported that the Industrial, Research and Energy (ITRE) Committee, which he chairs, had met with the Climate Action & Energy Commissioner, Miguel Arias Cañete, to discuss Nord Stream-2.
“The outcome was quite clear," he said, "no financial or any other support for Nord Stream-2 at the level of the European Union.”
The primary focus of discussion at the meeting, however, was on LNG terminals as game changers for regional energy security and diversification of supply; a second session delved into the prospects of U.S. natural gas exports to Europe. (Editor's note: Watch for our continuing coverage on Natural Gas Europe.)
In contrast to projects like Nord Stream-2, LNG terminals, MEP Buzek said, can reinforce alliances, like that with the U.S. He made mention of an LNG partnership proposal with America and said that many legislators in the U.S. were interested in opening up the Transatlantic gas market, which would involve the lifting of licensing requirements for exports as well as faster licensing procedures. “It is the responsibility of the administration,” he said, “and they are absolutely ready to do so.”
This would create, he said, a “win-win” situation because the industry in the U.S. is suffering as a consequence of low oil prices and would like more investment.
For Europe, MEP Buzek said LNG import is of crucial geopolitical importance. “And [the U.S.] understands that.”
The role of politicians, he said, is to create a good legal framework, plus the political conditions for a Transatlantic energy partnership, which he said he'd proposed happen much sooner than the Transatlantic Trade and Investment Partnership (TTIP), maybe even in the first half of 2016.
While opening up the session, Lithuanian MEP Antanas Guoga, who moderated the meeting, expressed his hopes of Poland and Lithuania being great partners in the energy sector, especially in gas.
“It's critical to our region,” he noted, “because gas plays a key role in EU energy systems and will continue to be of major importance for a very long time.”
Security, affordability and stability, he said, are of critical importance for the success of the Energy Union. He noted that all of the partners in the Baltic countries were present in order to make progress towards that.
Mr. Guoga recalled, “Baltic countries were 100% dependent on a single supplier, and that supplier, obviously, was not very friendly and abused its monopoly position. Therefore, Lithuania had the most expensive gas in Europe, and probably the world, for some time.”
The situation had caused the country a lot of pain and a lot of damage, he said, which will be difficult to undo.
“When you're paying too much for energy, for gas, it's difficult to create jobs,” said Mr. Guoga, who said this made for lower wages.
While Lithuania had overpaid for energy for years, he explained that the government took a bold step in making the decision to build the LNG terminal at Klaipeda. “And now Lithuania is an example for everybody.”
Now, he said, Lithuania will rely upon its partners–especially Estonia and Latvia–to be fully committed to helping to actualise the potential of that LNG terminal, i.e. using its full capacity.
Noting that members of the European Commission were present, he said their input is necessary for the interconnection in the Baltics. “We need the Commission now to say 'Lithuania's been brave' and hold out a hand and make sure we have enough funding and are doing the right thing for the future, and all this region, including Poland, will cooperate together to form a very strong energy union."
MEP Buzek reiterated that “decisions taken by individual member states can play important roles on a regional scale,” and that this is likely the case for the LNG terminals in Lithuania and Poland and could be for a potential project in Croatia.
The most important issues, he said, are alternative supply, strengthening energy security, and implications on pipeline gas. Meanwhile, gas contracts, said MEP Buzek, are easy to change when one has a new terminal.
Of the connotations, he offered Ukraine as an example of a country without an LNG terminal, but with a reverse-flow option from Slovakia; LNG, he said, is even better. Alternative uses of gas, like for the chemical industry, he added, have important implications, as does creating regional gas markets.
“Fantastic, from the point of view of energy internal market."
MEP Buzek noted the gradual formation of a global market for gas via LNG.
“LNG terminals and connections are an integral part of EU energy strategy,” he said, adding that next week the EU will publish its annual State of the Energy Union report, while by late January/early February it will unveil an LNG/gas storage strategy.
LNG terminals and connections, he noted, are a response to the core principle of the Energy Union.
"We would like to diversify our routes and sources of supply," he said. "Why? Because we are fighting for lower energy prices.”
According to MEP Buzek, when comparing energy costs with those of the U.S.–a huge cost advantage in the price of gas–the issue's importance is apparent, especially in light of TTIP negotiations and any agreement in the future.
“We also would like to decrease our exposure to energy threats, which we know very well,” he explained.
-Drew Leifheit