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GAS LNG 23 May, 2018 10:00 am   

Will the US co-finance the Polish LNG hub for the Three Seas?

The information that at the top of the Bucharest nine, talks are to be held on the Three Seas fund, which may be supported the United States, has been confirmed, writes Wojciech Jakóbik, editor-in-chief of BiznesAlert.pl.

The US will support the Three Seas

Onet talked to Sandra Oudkirk, deputy secretary of state for energy diplomacy. She revealed that the Three Seas project, or the presidential concept of integration, among others in the energy industry, of EU countries located between the Adriatic, Baltic and Black Seas, has the support of the US administration and is to be on the list of US priority projects.

– This means that the Three Seas is needed, because it will additionally be a bridge connecting many places in Europe on the north-south line. Being aware of the limited financial possibilities, we support projects that connect Europe, not divide it. We also know that Poland is also against Nord Stream 2 – one can read the Oudkirk’s statement in Onet.

One of the effects of the possible cooperation of the Three Seas countries in the gas sector may be the creation of a Polish hub for LNG from the USA, which would be supported by the fund of this group. American financial support would be important to it if it would lead to further expansion of LNG infrastructure. What is more important, however, is that if the Americans decided to support the export of liquefied gas to the Three Seas countries, there might be facilities that would make the supply of this fuel more attractive in competition with the offer of Russian Gazprom in Central and Eastern Europe.

– For the Central and Eastern Europe, the diversification of energy sources is also a breakthrough in history. The countries of the region have always been dependent on Russia. The US government advocates not only for the diversification of raw materials, but also for the diversity of fuel types on the market. For the US it is important that allied countries have access to what they want – said Oudkirk in an interview with Onet. I have confirmed information that Poles have not yet signed a timely contract for LNG supplies from the US precisely because Americans are still unable to offer an attractive price, although they are seeking such contracts.

US versus Russia

It is worth referring to the thesis distributed among others by the Russian Sputnik, who argues that US resistance to the Nord Stream 2 project also criticized in Poland results from the will to sell liquefied gas to Europe. Of course, the development of LNG supplies from America in Europe would be beneficial for private companies that would sign contracts. However, the US administration does not have such an overwhelming influence as the Kremlin on the state-owned Gazprom or Rosneft. Its role is limited to regulatory changes that may potentially facilitate exports, for example by simplifying the procedures for granting approvals for the construction of new export terminals, or preferences in deliveries to NATO countries or according to another criterion.

US long-term energy policy from the beginning of this century is directed against projects that make Europe dependent on raw materials from Russia. This was the case of the Druzhba oil pipeline in the 1980s and the Yamal gas pipeline in the 1990s. The Americans advocated the diversification of oil supplies using the Baku-Tbilisi-Ceyhan oil pipeline in the first decade of this century and the Nabucco pipeline in the second. They criticized Nord Stream 1 and criticized Nord Stream 2. This course was adopted long before the shale revolution dated symbolically in 2008, from which the process of transforming the US from an importer into a hydrocarbon exporter, including liquefied gas, began. It is so, because limiting the Russian influence in Europe, after the collapse of the Soviet Union also through the energy sector, is in the strategic interest of Washington and there have been no changes since the Cold War. The Russian media benefits from the fact that not everyone follows this policy closely, but in Europe you can find manifestations of anti-Americanism, which are a good basis for the promotion of this type of message.

American interests in the discussed area coincide with Polish ones. Although the US threat that they can introduce sanctions against the Nord Stream 2 pipeline project does not mean that the project will be blocked, even the Kremlin admits that the situation is “quite difficult”, according to the spokesman Dmitry Peskov. – This situation is quite difficult after Washington’s recent statements – the spokesman quoted by TASS said. Complications growing in relation to the project, which, despite the favorable declarations of Chancellor Angela Merkel that it also has a political dimension, still enjoys Berlin’s protective umbrella, may cause at least the delay of Nord Stream 2. In this respect, cooperation between the USA and Poland is profitable.

Poland can benefit from the convergence of its interests with the American ones, as long as it will not affect the cohesion of the European Union. Security, also energy, is based on two pillars: NATO and EU. One should not blow up the other one. The inner-EU Three Seas initiative supported by the United States can be a platform for effective transatlantic cooperation to increase the energy security of Central and Eastern Europe which is still under the influence of Russian Gazprom. Poles can make money from it. It is no coincidence now that there is information that they could invest in a terminal or deposits in the United States. Reaching for most of the supply chain could allow you to optimize costs and even to expand LNG on the global market.

To be continued

New information will probably appear on the business forum during the Bucharest summit, which will take place on 17-18 September. The Three Seas fund will be presented then. In BiznesAlert.pl I wrote that Bank Gospodarstwa Krajowego could be involved in it, among others. The president and the prime minister are counting on the support of the initiative by the USA, which in the event of success will gain a larger market for LNG, because the infrastructure will allow reaching for a larger number of customers.

Meanwhile, on Monday 21 May, Poland’s Minister of Foreign Affairs Jacek Czaputowicz and US Secretary of State Mike Pompeo will meet. I wonder if during the talks the topic suggested by the Wall Street Journal will appear, i.e. the proposal to open the US to trade with the EU in exchange for abandoning Nord Stream 2. Can US cooperation with the Three Seas herald a return of TTIP?



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