Following the outbreak of the full-scale war in 2022, the European Union has restricted energy imports from Russia, profits from which fuelled Moscow’s ability to wage the war against Ukraine.
The U.S. increased its supplies to Europe to cover the deficit. Under the Trump administration, however, European relations with the U.S. have soured and European businesses began to be wary of dependency on Washington and began to look for other options.
Europe has few options, as negotiations with Qatar to increase liquefied natural gas (LNG) volumes have reached a deadlock. Although the deployment of renewable energy sources has accelerated, the pace is not fast enough to allow the EU to feel secure, according to Reuters.
“If there is a reasonable peace in Ukraine, we could go back to flows of 60 billion cubic meters (of Russian gas), maybe 70, annually, including LNG,” Didier Holleaux, executive vice president at France’s Engie, told Reuters in an interview.
France’s Engie is partially state-owned and was one of the largest buyers of Russian gas before the all-out war in Ukraine. Holleaux added that Russia could supply around 20-25% of EU needs, down from 40% before the war.
Patrick Pouyanne, the head of the French oil company TotalEnergies, highlighted another concern: Europe should not over-rely on U.S. gas. TotalEnergies is a large U.S. LNG exporter and sells Russian LNG from the private firm Novatek.
“We need to diversify, many routes, not over-rely on one or two,” Pouyanne told Reuters.
“Europe will never go back to importing 150 billion cubic meters from Russia like before the war … but I would bet maybe 70 bcm.”
Germany, which relied heavily on cheap Russian gas before Russia’s large-scale invasion, is now also considering at least partial resumption of supplies.
Several companies that are residents of the Leuna Chemical Park, one of Germany’s largest chemical clusters hosting plants of Dow Chemical and Shell, among others, emphasized the need to resume Russian supplies.
“We need Russian gas; we need cheap energy — no matter where it comes from,” said Klaus Paur, managing director of Leuna-Harze, a mid-sized petrochemical maker at the Leuna Park.
“We need Nord Stream 2 because we have to keep energy costs in check.”
“We are in a severe crisis and can’t wait,” stated Christof Guenther, managing director of InfraLeuna, the park operator.
He added the German chemical industry has cut jobs for five quarters in a row, something not seen for decades.
“Reopening pipelines would reduce prices more than any current subsidy programs,” Guenther continued.
Despite attempts to maintain its presence in Europe, Gazprom’s gas exports to the EU remained low.
Gazprom’s financial woes stem largely from the EU’s decision to reduce reliance on Russian energy following the full-scale invasion of Ukraine.
Compounding its troubles, Russia’s direct pipeline gas supplies to the EU have ceased completely after Ukraine refused to extend its transit agreement with Gazprom beyond Dec. 31, 2024.
