US and EU vow to co-operate over European gas supplies amid Russia war fears

The EU and US have pledged to work together to safeguard European energy supplies should be feared Russian attack on Ukraine result in a collapse in gas shipments to the continent.

Russia provides 40 per cent of the EU’s gas and officials worry that the fallout from an attack on Ukraine could severely curtail supplies if Moscow decides to hit back against western sanctions by reducing pipeline flows.

“The United States and the EU are working jointly towards continued, sufficient and timely supply of natural gas to the EU from diverse sources across the globe to avoid supply shocks, including those that could result from a further Russian invasion of Ukraine,” US president Joe Biden and European Commission president Ursula von der Leyen said in a joint statement on Friday.

The show of support from the White House comes as the EU prepares to send a delegation to Azerbaijan in the hope of arranging potential emergency supplies of gas, in an indication of the depth of concern in the bloc over the risk of a renewed surge in energy prices in the event of war.

“We are collaborating with governments and market operators on supply of additional volumes of natural gas to Europe from diverse sources across the globe,” the presidents’ statement said. “We intend to work together, in close collaboration with EU member states, on LNG supplies for security of supply and contingency planning.”

The US has already held talks with Qatar and other large gas exporters focused on securing additional seaborne liquefied natural gas cargoes.

Brussels is also in talks with some Asian countries on possible LNG swap deals, a commission official said. “What we are doing is to reach out as much as possible to any of the suppliers,” they added.

The move to draw up contingency plans has become more urgent in recent days after this month’s diplomatic talks between Washington and Moscow made scant progress. Russia has deployed more than 106,000 troops close to its border with Ukraine and more inside Belarus on Ukraine’s northern border.

While the Kremlin has denied US claims that it is planning an invasion, the EU has been in talks with the US over what Washington describes as a “massive” package of western sanctions in response to Russian aggression. But EU member states are acutely aware of their vulnerability to disruptions in supplies from their biggest gas supplier if the conflict worsens.

Friday’s joint statement did not name the potential sources of additional gas, but said it was called on “all major energy producer countries to join us in ensuring world energy markets are stable and well-supplied”.

Kadri Simson, the EU’s energy commissioner, will fly to Azerbaijan early next month for talks with the country’s energy and natural resources ministers, in a bid to drum up support for additional gas flows to the EU, a bloc official said.

Simson has said she will also travel to Washington on February 7 to hold further discussions over energy supplies at the EU-US Energy Council.

Fatih Birol, head of the International Energy Agency, said this month that Russia was already throttling gas supplies to Europe, pointing out that Russian gas exports to Europe were down 25 per cent year on year in the last three months of 2021.

The IEA believes Russia is holding back at least one-third of the gas it could send to Europe.

Analysis from the Bruegel think-tank this week showed that, assuming normal temperatures, a boost to LNG imports could prevent the most severe gas shortages in Europe this winter, but that it would not be possible to replace every lost molecule if Russia cut all its supplies.