U.S. Importing Russian Gas to Cope with Severe Weather

The United States has been importing Russian gas from a liquefied natural gas plant in the Yamal Peninsula in recent weeks, a move that comes as a surprise having in mind the general U.S. policy toward Russian energy, Deutsche Welle reported.

The import from the Yamal megaproject plant, owned by Novatek, Russia’s largest independent natural gas producer, is reportedly going through a French intermediary company.

Russia is the world’s largest exporter of natural gas. And for decades, Moscow has been dependent on the pipelines that carried the valuable commodity from its gas fields in northern Russia and Siberia to Western Europe. State energy giant Gazprom still does the majority of its business via these pipelines. But the pipelines passing through several states are politically problematic, and several disputes were noted over the years.

This is why the Kremlin has been trying to reduce its financial dependency on natural gas and turn to liquefied natural gas, which is created by cooling natural gas until it is condensed into a liquid, thereby allowing it to be transported via tanker rather than through a pipeline. Russia’s second-largest gas producer, Novatek, is particularly active in this area. Its CEO, Leonid Michelson, is said to be the richest man in Russia.

For years, Washington was doing everything it can to make it harder for Russia to export gas to Europe, which is why the latest imports of the fuel directly to the U.S. is surprising.

However, experts say the new circumstances are less spectacular than they at first appear. Energy prices in the U.S. have temporarily spiked because of the recent cold snap there. The country suddenly needs natural gas to cope with the severe weather, and it’s turning to the international market for a solution. “There’s nothing political about it,” says Svyatoslav Bikh from the Analytical Center for the Government of the Russian Federation, a Moscow think tank.

Generally speaking, it’s difficult for Russia and other states to export to the U.S. “Prices are low there, because the Americans have enough gas of their own,” says Bikh.

It’s quite possible that the U.S. will take the occasional tanker of liquid gas from Russia in the future, too. But experts in Moscow believe it will always just be comparatively small amounts.

The U.S.-Russia transaction is indicative of how the energy business is changing all over the world. Transporting gas through pipelines has always meant that trade in the industry was largely regional. Now, with tankers and liquefied natural gas, this business too, is becoming increasingly globalized. The competition is getting fiercer. And that’s a benefit for consumers, as it keeps prices low.