Ukraine's neighbours eye Russian gas hedge

Written By Unknown on Sabtu, 08 Maret 2014 | 21.29

FOUR Central European nations are urging the US to boost natural gas exports to Europe as a hedge against the risk that Russia could cut its supply of gas to Ukraine, but the White House says such a move would take more than a year.

Ambassadors from Hungary, Poland, Slovakia and the Czech Republic made their appeal on Friday in a letter to John Boehner, the Republican speaker of the US House of Representatives.

A similar letter was expected to be sent to Harry Reid, the Democratic leader of the Senate.

The letter from the four nations, known as the Visegrad Group, asks for Congress to support speedier approval of natural gas exports. It notes that the "presence of US natural gas would be much welcome in Central and Eastern Europe".

The ambassadors say the unrest in Ukraine has revived Cold War memories, and energy security threatens the region's residents daily.

"Gas-to-gas competition in our region is a vital aspect of national security and a key US interest in the region," the ambassadors wrote in a letter obtained by The Associated Press.

Ukraine is heavily dependent on Russian natural gas, and previous disputes between Ukraine and Russia have led to supply cuts.

Russian state company Gazprom has increased the pressure on Ukraine's new government - which already owes $US1.89 billion ($A2.09 billion) for past deliveries - by warning that if Ukraine doesn't pay its debts, Russia could retaliate by cutting off wider supplies to Europe, as happened in 2009.

Recent advancements have made it possible for Russian gas that normally flows to European Union customers through Ukraine to flow in the other direction, so Poland and Hungary could supply gas to Ukraine if Russian supplies halted.

But with gas supplies limited, the region remains vulnerable unless the US makes it easier to import American natural gas, the ambassadors argued.

Boehner and Republicans have been urging the Obama administration to clear the way for more exports to capitalise on America's current natural gas boom.

The US Energy Department has approved only six export licences, while about two dozen remain pending.

"The ability to turn the tables and put the Russian leader in check lies right beneath our feet, in the form of vast supplies of natural energy," Boehner wrote this week in an opinion piece in The Wall Street Journal.

The White House has argued that Russia's dependence on gas revenues makes it unlikely that the country would cut supplies to Europe despite Russia's worsening conflict with Ukraine over the Crimean peninsula.

White House spokesman Josh Earnest said on Friday that because Europe has had a relatively mild winter, gas supplies are sufficient.

He said even if the US did approve more export licences, it would take until the end of 2015 for gas to be delivered.


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