US and Russia race for Europe’s energy market

Global Business

Washington has been thrown into fiery debate over the Trump-Putin summit. The U.S. president is being criticized for undermining the intelligence institutions of its own country on the global stage.

While discussions have exposed new political diversions, an economic battle is brewing on the sidelines. CGNT’s Nanuka Danelia reports.

Donald Trump’s seemingly harmonious ties with Vladimir Putin in Helsinki while criticizing domestic U.S. matters, sent shock-waves through Washington. But there was one, and possibly, the only issue Trump directly challenged the Russian president on: the energy market.

“We’ll be competing, as you know the United States is now or soon will be but I think it actually is right now the largest in the oil and gas world. So we’re going to be selling LNG and we’ll have to be competing with the pipeline. And I think we’ll compete successfully although there is a little advantage locationally.” Said the U.S. president, Donald Trump.

In fact, the U.S. is the world’s biggest natural gas producer, and this year it is poised to surpass Russia for the first time in about four decades in oil production as well. But when it comes to exporting natural gas, the U.S. lags behind. Washington wants to fix that.

Can the U.S. win over markets dominated by Moscow? At first glance the chances seem bleak. Germany has begun the construction of the second NORD Stream pipeline to double its Russian gas imports. That, despite major pushback from U.S. and other NATO members. But not all odds are in Kremlin’s favor. The growing number of Eastern European nations is setting an example in diversifying their markets. Their major drive? Russia’s history to use energy giant Gazprom as a bargaining chip.

Russia has not only hiked prices, but it has also cut the supply to Europe over political and territorial disputes with Georgia and Ukraine in recent years.

Facing cold winters without heat is a gamble many are simply not willing to take. Both Poland and Lithuania have built liquefied natural gas terminals and they are now importing LNG from countries including the U.S. and Norway. And Georgia has become one of the only Eastern European states to manage to move away from Gazprom.

“We have made sure that Georgia does not import single cubic meter of gas from Russian Federation, we have diversified our sources, mainly to Azerbaijan, who has been throughout the years a very realiable and strong partner and ally.” Georgian ambassador to U.S., David Bakradze said.

Why is liquefied natural gas becoming the front line? The industry has been growing at record levels and it is expected to take over oil as the world’s primary energy source. Leading this lucrative sector is an opportunity neither the U.S. nor Russia wants to pass up.

Kent Moors breaks down how LNG is shaking up the global energy market

CGTN’s Susan Roberts spoke with Kent Moors, expert in oil and natural gas policy, and risk management, about the booming LNG industry.