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APPEA hoses down suggestions Aus LNG producers could supply Europe

THE Australian federal government has suggested Australian LNG could be sent to Europe if conflict between Russia and the West led to supply disruptions in Europe.

 Aus LNG to the rescue?

Aus LNG to the rescue?

The US and EU have threatened Russia with severe, at this point unspecified, financial sanctions, if the troops president Vladimir Putin has massed near the Ukraine border invade. 

The escalating crisis has sparked fears that Europe, which is already enduring a months-long gas shortage, could face further supply issues, given it relies on Russia for nearly one-third of its gas. 

Biden officials told Bloomberg earlier this week that the US is prepared to ensure alternative natural gas supplies to Europe covering a potential shortfall from Russia. 

In a statement sent to Energy News Australian trade minister Dan Tehan said Australia stands ready to "support our friends and allies". 

"Australian LNG exports are expected to grow this financial year, Australian LNG exporters are ideally placed to meet any demand that may arise globally," he said 

However, the federal government has no direct control over Australian LNG exports or where gas goes, with most under contract and the rest being sold on the spot market to whoever will pay the most.  

APPEA CEO Andrew McConville was blunt in his response to the minister's suggestion. 

"We've got domestic and contracted obligations to meet, which are our priorities," he told Energy News.

"Beyond that, the market shifts to meet demand." 

LNG exports from Australia hit a record high of 80.9 million tonnes in 2021, according to EnergyQuest, however all of those cargoes went to Asia. 

Both Tehan and resources minister Keith Pitt refused to confirm whether Australian officials were in active discussions with European counterparts about gas supply.

Pitt said Australia "stands ready to assist with any request for further supplies".

"We will of course continue to meet our existing contracts but where there is a shortfall Australia will always look to support our friends," Pitt said. 

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APPEA CEO Andrew McConville

Grattan Institute energy director Tony Wood told the ABC that Australian gas would be able to supplement supplies, a role it already plays. 

"I'm sure the conversations are being had (but) it doesn't mean that Australia actually supplies its gas to Europe — Australia is a long way from Europe," he said. 

"It could mean that gas that otherwise might go to Asia is diverted to Europe and then Australian gas replaces that gas in Asia."

Analysts have highlighted that Russia may be using the troop build up to underline its desire for Germany to approve the Nord Stream 2 pipeline, which has faced regulatory delays in recent months. 

The controversial pipeline pipes gas from Russia to Germany but bypasses Ukraine and Poland, depriving them of revenues from tariffs as it runs under the Baltic Sea. 

The US and some European states view the pipeline as a strategic threat as it increases the continent's dependence on Russian gas, with claims already surfacing that the Kremlin has been stifling existing flows in a bid to gain leverage to approve Nord Stream 2, exacerbating the energy crunch.

US state department spokesperson Ned Price said the pipeline would not go ahead if Russia invades Ukraine. 

"I want to be very clear: if Russia invades Ukraine one way or another, Nord Stream 2 will not move forward," he told NPR.

"I'm not going to get into the specifics. We will work with Germany to ensure it does not move forward."

UK foreign secretary Elizabeth Truss said in a speech to the Lowy Institute last week that her government was "pushing for alternatives in energy supply, so that nations are less reliant on Russia for gas". 

"We will stand up for our economic security," she said. 

"It means cutting strategic dependence on authoritarian regimes, starting with Europe's dependence on Russian gas."

Tehan said the current geostrategic environment that Australia faces is "the most complex since the Second World War".

"This environment will continue to present both challenges and opportunities to Australian exporters now and into the future," he said. 

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Energy News Bulletin Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Energy News Bulletin Intelligence team.

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