Uniper Says Europe Needs To Find New Gas Sources, Fend Off US
FRANKFURT, Aug 8 (Reuters) - European gas suppliers must take a more proactive role in tapping into diverse supply sources in view of U.S. attempts to sell its liquefied natural gas (LNG) into Europe, the CEO of German utility Uniper said on Tuesday.
Uniper is one of five Western firms that have invested in Nord Stream 2, a Russian gas export pipeline to Europe, which the latest U.S. sanctions related to Russia's activities in Crimea may make harder to realise.
While some U.S. measures remain discretionary, they may take aim at the planned twin pipeline to the existing Nord Stream 1 link connecting Russia's gas fields with Germany via the Baltic Sea, which could keep future U.S. shale gas deliveries away.
"The core reason (for the sanctions) are strategic economic interests, meaning the targeted dominance of the U.S. in energy markets," Uniper CEO Klaus Schaefer said in a call with journalists on its first-half earnings.
"Uniper's readiness to finance the Nord Stream 2 project with other European partners arises from the conviction that this additional gas link makes economic sense and that our contribution to its financing will be profitable."
Nord Stream 2 is due to be completed in 2019 with a likelihood of helping Moscow boost its oil and gas revenue and market share in Europe, where gas resources are dwindling.
Schaefer said that European buyers could compete with those in Asia for LNG if they wanted to secure supply from the world market, where U.S. cargoes were some 50 percent more expensive compared with European references prices.
"Nobody wants to pay such a premium," he said.
He said he was comparing the full costs of U.S. LNG at the U.S. trading point Henry Hub with gas prices on the Dutch Title Transfer Facility (TTF) for the coming months. U.S. domestic prices are cheap but it has to add liquefaction, shipping and regasification costs.
Politicians in European countries have differing views on U.S. and Russian intentions in the energy market.
German Chancellor Angela Merkel recently described Nord Stream 2 as a purely economic project, while Poland has challenged it in court and is seeking more U.S. LNG to try to break its reliance on Russian supplies.
Schaefer also said European gas suppliers may look at new ways to produce synthetic gas from surplus renewable power.
Uniper is among companies experimenting with so-called wind gas, which could find its way into gas distribution networks via electrolysis and that way supply home-produced gas.
(Reporting by Vera Eckert; Editing by Christoph Steitz and David Evans)
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