Gas prices in Europe to rise 50%, if it abandons Russia’s supplies – Energy Minister

Domestic prices in Europe will go up by at least 50 percent, if it cuts supplies from Russia, according to Russia’s Energy Minister Alexandre Novak.

“Moving away from pipeline transportation of natural gas, construction of terminals and deliveries of liquefied natural gas will lead to an increase in gas prices in Europe from the current $380 per 1,000 cubic metres to at least $550,” Novak said in an interview to the Russia 24 TV Channel.

“And the question arises: are the economies of European countries ready to supply and consume gas at such a price?” the Minister asked.

The US has insisted that Europe needs to urgently cut its dependence on Russian gas, with the US Secretary of State John Kerry saying Moscow shouldn’t use energy exports as a political weapon.

Meanwhile, Russian energy companies have started to feel the pulse in markets outside Europe, mostly focusing on Asia.

Gazprom talked to Kuwait and Egypt about increasing LNG supplies and hopes to sign a long-term supply deal with China next month. Also, the president of Russia’s oil major Rosneft has toured Japan, South Korea, Vietnam and India.

While in theory there are some alternatives to Russian gas that include supplies of liquefied natural gas (LNG) from Qatar and Nigeria and shale supplies, both domestic and America’s, a more in-depth analysis shows that moving away from Russian gas would be painful for Europe.

A study by Bernstein Research, a widely-recognized Wall Street research and brokerage firm, says that cutting off Russian gas would cost $160 for every single person in Europe. The costs include extra expenses to get rid of 15 billion cubic meters (bcm) of residential and industrial gas demand, a $215 billion investment and additionally $37 billion annually in the form of higher energy bills.

“Like it or not, but Europe is stuck with Russian gas,” the Financial Times quotes Bernstein’s Oswald Clint.

Full article: Gas prices in Europe to rise 50%, if it abandons Russia’s supplies – Energy Minister (Russia Today)

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