G7 to Reduce Europe's Reliance on Russian Gas

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - A meeting of the group of seven industrial nations (G7) has agreed to reduce Europe's dependence on Russian gas in light of the ongoing conflict between Russia and Ukraine.

At a meeting in Rome, G7 energy ministers said they were "extremely concerned about the energy security implications of developments in Ukraine as a consequence of Russia's violation of Ukraine's sovereignty and territorial integrity."

The group has promised to develop a broader mix of energy supplies, which includes liquefied natural gas (LNG), additional gas pipelines and renewable. They have also committed to strengthening the existing supply network infrastructure. The group warned Russia that "energy should not be used as a means of political coercion."

Europe relies on Russian gas for around one third of its needs, with half of that coming through Ukraine.

U.K. Energy and Climate Change Secretary, Ed Davey, said: "Today in Rome, the G7 has started a process of disarmament to prevent energy being used as a weapon in the future. We agree that we need a more energy secure future, meaning that no single state or supplier can use such tactics. We have agreed to do what's needed to achieve a systematic, enduring step change to improve energy security - not just for the nations in the G7, but for our friends and allies, with a particular focus on Ukraine and its Eastern European neighbours who are most at risk from the use of these tactics by Russia".

Gas supplies to Europe are in danger of being disrupted as the crisis between Ukraine and Russia intensifies. At the start of this month, Russia threatened to cut natural gas supplies to Ukraine unless the country prepaid for June's gas delivery by the end of May. Russia's state-owned natural gas company Gazprom (PINK:OGZPY) (Moscow) claimed that Ukraine already owes it around €2.5 billion ($3.5 billion) for gas already delivered.

Despite the G7's proposals, Europe will remain dependent on Russia gas for the immediate future. At the Rome meeting, German Vice Chancellor Sigmar Gabriel admitted: "I don't know anyone in the world who could tell us how Europe's dependency on importing Russian gas can be changed in the short term. Pure technical changes in the energy market will not be enough. The process needs to be accompanied by diplomacy and politics and agreement on contracts between partners".

The G7 has agreed some measures, and stated: "In the medium term, the diversification of sources and routes for fossil fuels is essential. No country should depend totally on one supplier. We intend to promote a more integrated LNG market, including through new supplies, the development of transport infrastructures, storage capacities, and LNG terminals. We support the opening of new routes to supply energy, in particular the Southern Corridor, as a route for possible other sources of supply for Europe. We will further promote flexible gas markets, including relaxation of destination clauses and producer-consumer dialogue".

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