Stock Groups

Exclusive-U.S. talks to energy firms over EU gas supply in case of Russia-Ukraine conflict -sources -Breaking


© Reuters. FILE PHOTO – Flames from the gas burner of a cooker can be seen in this photo, taken February 1, 2017, in Nice. Image taken February 1, 2017. REUTERS/Eric Gaillard

Dmitry Zhdannikov and Ron Bousso. Simon Lewis, Timothy Gardner.

LONDON/WASHINGTON – Two U.S. officials, and two sources from the industry told Reuters that talks were held with several energy companies to discuss contingency plans.

America is worried that Russia may be preparing to launch a military attack on Ukraine, which it invaded back in 2014. Russia has denied plans to attack Ukraine.

Around a third (or more) of the European Union’s gas supply is dependent on Russia. Any sanctions by the United States over any conflict might disrupt this supply.

An energy shortage caused by the lack of fuel would be exacerbated if Russia stops supplying gas to Europe. Rising power prices and rising business costs have pushed up energy bills for consumers as well as businesses, prompting protests in certain countries.

State Department representatives approached the companies in an attempt to find out where supplies could be obtained if necessary, according to two sources from the industry who spoke to Reuters under oath because of the sensitive nature of the subject.

According to industry sources, these companies informed the U.S. government that gas supplies worldwide are limited and there’s not enough gas in the world to replace large quantities from Russia.

Amos Hochstein was the senior advisor to energy security at the State Department. This senior U.S. State Department official spoke on condition of anonymity. According to the official, the State Department didn’t ask companies for increased output.

Source said that they had discussed several contingencies, and also talked with their nation-state partners and allies about what to do next.

“We have done this with European Commission, but it has also been done with energy companies. You can be sure that we spoke to them about all our concerns. We also discussed various contingencies. However, there was no ask about production.

Sources said U.S. officials asked companies whether they have the capability to boost supplies.

The names of the companies that U.S. officials reached out to were not clear. Royal Dutch Shell, ConocoPhillips (NYSE 🙂 and Exxon(NYSE 🙂 did not respond to questions about whether they had been contacted. Chevron Corp (NYSE:), Total, Equinor, and Qatar Energy didn’t immediately reply to our request for comment.

Another industry source stated that his company could postpone maintenance on gas fields, if required.

The spokesperson of the U.S. National Security Council declined to comment on U.S. talks with energy companies but said that contingency planning was in place.

The spokesperson stated that “Assessing spillovers and looking for ways to minimize them is standard governance” and was good practice.

“Any detail in this regard which is released to the public does not reflect the seriousness and depth of our discussions. We are ready to impose substantial measures with allies and partner.”

Moscow is provoking the West with its massing of troops close to Ukraine over the last two months. This follows its 2014 seizure and support of separatists in Eastern Ukraine fighting Kyiv.

Biden had previously said to Vladimir Putin that Russia’s latest move against Ukraine would lead to sanctions and an increase in U.S. military presence in Europe.

Russia claims it is not planning to attack Ukraine, and that it can move troops to its territory as it pleases.

According to the second source, “The United States has promised that it will support Europe if there’s an energy shortage because of conflict or sanctions.”

Hochstein was also mentioned by Hochstein.

European buyers will need superchilled gas cargoes to make up for the loss of Russian pipeline supplies to Europe.

To become the largest LNG supplier in the world, U.S. liquefied natural gases (LNG) exports are expected to rise this year. Europe faces competition from top LNG suppliers like the United States, Qatar and Japan with other major consumers such as China and Japan who are also facing an energy crisis.

Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.