The Economist Suggested How to Replace Russian Gas in Europe
OREANDA-NEWS. Europe will not be able to give up Russian gas, but it should look for alternatives to supplies from Gazprom, according to an editorial in The Economist.
The publication notes that the countries of the Middle East and North Africa have large reserves of fuel, and in 2019 Algeria and Qatar accounted for a total of 13% of the European market.
"However, Europe faces competition when it comes to additional supplies," the article says.
Thus, in the struggle for gas, Europeans have to compete with Asian countries, which account for 75% of world LNG imports, and more recently with Latin America.
A difficult situation for Europe has arisen due to the liberalization of the gas market - a reduction in the share of long-term contracts with prices tied to oil prices. Among other things, the problems for Europeans were created by the countries of the Middle East, where over the past ten years, domestic consumption of blue fuel has grown by an average of 4.6% per year.
The publication also notes the impossibility of replacing the Russian energy carrier with American LNG. Fuel from the United States is too expensive, and significant investments in the shale industry will be required to make it cheaper.
For the time being, Europe can only consider the Southern Gas Corridor as an alternative to supplies from Russia, which allows transporting up to ten billion cubic meters of fuel from Azerbaijan to Italy.
“This is only a small part of the needs of the European Union,” the newspaper stated.
But, nevertheless, the article notes that this project will help reduce the share of Russia in some small countries, such as Bulgaria.
Also The Economist draws attention to the future gas pipeline from Israel with a length of 1,900 kilometers. The capacity of this transport system will be 20 billion cubic meters of gas.
"Nevertheless, this is not enough to provide fuel for the whole of Europe. A complete rejection of Russian gas is an overly ambitious undertaking, even in the longer term," the publication emphasizes.