Russia is a very big gas supplier to the EU nations. As the largest producer of natural gas in the world, the Russian resources are also an important part of the supply situation in the EU. A clear signal about this is the current Nord Stream 2 project, which will lead a new gas pipeline from Russia, through the North Sea, to Germany. The frequent political tensions between Russia and the western world does however cause some skepticism regarding the EU’s dependency on Russian gas.
The topic has been a matter of discussion in the EU for a long time, and according to EU energy commissioner, Miguel Angel Cañete, the Russians should gradually be replaced as suppliers. “Russia will continue to be an important energy supplier to the EU. What is important is to ensure that Russian energy supplies into Europe are subject to competitive pressures from the existence of other suppliers”, Cañete earlier this week said at an energy conference in Brussels. This according to energy news site Montel.
According to Cañete, the alternative ways to get gas to the EU include better possibilities to include liquefied natural gas (LNG) from the US, and the construction of new pipelines to the Caucasus, where Azerbaijan has a big gas production. If Azerbaijan is to supply the EU with gas, without the pipeline passing through Russia, it would instead have to pass through Turkey however, another country which the EU from time to time has diplomatic tensions with.
More than 70 % of the EU’s gas consumption is currently covered by import. Three quarters of this import comes from Russia and Norway. Last year, the Russian export of gas to Europe rose by more than 8 % and reached 193.9 billion cubic meters. This means that it is a massive amount of gas, that the EU is now looking for other suppliers for.
July 12 2018. When the annual contract for 2018 closed for trading in December last year, it cost around 25 EUR/MWh. Now however, it looks like the average system price of the year could turn out to be 45 EUR/MWh.