US, Russia on Collision Course as They Compete for European Gas Market

Visiting Poland this week, U.S. President Donald Trump pledged to boost exports of American liquefied natural gas (LNG) to Central Europe and take on Russia’s stranglehold on energy supplies.

“America stands ready to help Poland and other European nations diversify their energy supplies so that you can never be held hostage to a single supplier,” Trump told reporters after talks with his Polish counterpart Thursday.

Up to now, that supplier has been Russia. It supplied around a third of Europe’s gas demand in 2016, with an even greater share in many of the former Soviet states in Central and Eastern Europe.

Watch: US, Russia on Collision Course in Competition for European Gas Market

Natural gas and dominance

Russian state-owned firm Gazprom shut off pipelines to Ukraine in 2015, depriving Kyiv of a major source of revenue and disrupting supplies to Eastern Europe.

“It’s a key pillar of Russian foreign policy: of using gas and energy as a means of asserting dominance over Central Europe,” said Marek Matraszek, founder of the lobby firm CEC Government Relations, who played a major role in the Polish government’s acquisition of U.S.-built F-16 fighter planes.

The first shipment of American liquefied natural gas arrived at the port of Swinoujscie on Poland’s Baltic coast last month. The port facility and liquefaction plant were finished in 2015, aimed at diversifying the country’s energy sources and enabling Poland to become a hub supplying imported gas across Central and Eastern Europe.

With that in mind, the Three Seas Initiative Summit in Warsaw Thursday brought together leaders from a dozen Eastern European nations, plus Trump. He pledged the United States will never use energy as a political tool. 

Russia’s pipeline

Energy analyst Grzegorz Malecki, a former head of Poland’s Foreign Intelligence Agency says Russia will be watching with interest.

“If this new source of gas supplies is moved forward and the infrastructure built, it may cause Russia to change its approach. The Polish government is probably counting on it. Russia may change its politics towards Poland regarding energy,” Malecki told VOA in an interview this week.

Russia has plans of its own to boost exports. Initially scheduled to open in 2019, the Nord Stream 2 pipeline would double its capacity to export gas directly to Germany beneath the Baltic Sea, bypassing Ukraine. Eastern European states want the project blocked.

“If we want to have United States’ LNG supplies in Central Europe, we also want to see the United States getting tough on Nord Stream 2, which means getting tough on Russia,” Matraszek said.

American LNG and the Nord Stream 2 project are on a collision course, with Poland stuck in the middle, Malecki said.

“It’s hard to hide the fact that these two projects compete with each other. The odds are that there will be a clash of these energy giants in Europe,” he said.

Three-hundred kilometers west along the Baltic coast from where the existing Nord Stream pipeline comes ashore in Germany, Trump and Russia’s President Vladimir Putin held their first face-to-face meeting at the G-20 Summit in Hamburg Friday.

If the American LNG deal goes through, it could have a broader impact on U.S.-Russia relations, said John Hannah of the Washington-based Foundation for Defense of Democracies.

“I think it could all happen relatively quickly and in a way that will give us much stronger leverage over Putin and the Russians to begin pushing back against some of the more aggressive activities that we’ve seen, not only in Europe but against the United States as well,” Hannah said.

Trump remains upbeat about his relationship with Putin, but the evolving energy policies in Europe will likely remain a source of friction.
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