Winter in the US may open the way to Russian LNG, said the expert

CC BY 2.0 / U.S. Navy / Mass Communication Specialist 2nd Class Bryan Blair / Navy US Navy accompanies the tanker for transportation of LNG. Archival photoWinter in the US may open the way to Russian LNG, said the expertCC BY 2.0 / U.S. Navy / Mass Communication Specialist 2nd Class Bryan Blair /

A cold snap in the United States and the following regional spikes in gas prices in the country may again lead to the fact that the United States will be profitable to buy Russian LNG, told RIA Novosti analyst, energy Centre of Moscow school of management SKOLKOVO Alexander Sobko.

On Thursday the official representative of Russian foreign Ministry Maria Zakharova said that three tanker with Russian LNG were sent to the United States. Previously it was known only about two such possible supply, both of which occurred in the winter.

«To a large extent we see a repetition of last year’s events. The cold snap in the United States and the rise of domestic gas prices — during the week from 3.2 to 4.7 per dollar dollar per million BTU. But despite significant price increases, such cost of gas at Henry Hub is not enough for profitable export of LNG to USA (especially now, after the peak, prices again declined slightly),» commented the expert Agency.

«But against this background, exactly like last year, due to infrastructure constraints (shortage of gas), prices in the region «New England» (Boston) rose to 10.5 dollars per million BTU. It’s exactly the same price now offered to buyers on the spot markets of Asia. But the cost of shipping from Europe to the North of the United States more than two times lower in comparison with the transport in the Asia Pacific region. Of course, in these circumstances, LNG is more profitable to sell in the United States,» he added.

A substantial portion of LNG from the project «Yamal LNG» is overloaded it in the European terminals, and the owners of the liquefied gas make the decision on the final point of delivery, said the expert. And it is here that come into play infrastructure and regulatory constraints in the USA that open the way for Russian LNG.

«Theoretically, it would be advantageous to import into the us LNG directly to Boston. But in practice the law on domestic trade of the United States prohibits use for domestic transport vessels constructed outside the United States (and LNG tankers built at Korean shipyards),» Sobko said.

«This forces the country to meet the seasonal peaks in the coastal regions to import foreign LNG, and this role for the reasons mentioned above is quite suitable to the Russian liquefied natural gas. The frequency of such deliveries will be determined by the frequency of cold snaps in the United States, and, consequently, bursts of regional gas prices in the United States,» he concluded.