Sopuruchi Onwuka

Russia will likely be shut out permanently from global energy markets once Europe can operate without the country’s oil and gas, and Australian gas liquefaction and export industry is taking position to fill gaps in countries switching supplies from Moscow.

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Top energy executives said at a conference in Australia that sidelining of Russia from international oil and gas trade would cause significant realignment of energy commodity flows across the world, enabling producers with robust capacity to expand their market influence.

The Oracle Today reports that natural gas is traded on the basis of long term sales and purchase agreements, tying plant capacity production outputs to supply commitments to dedicated buyers. However, countries and companies with robust capacity take advantage of spot market opportunities to explore more market shares from rising demand centers.

As of 2021, Australian terminals for liquefied natural gas exports had a combined capacity of 87.6 million metric tons per year. Australia and Qatar are currently the major exporting countries of LNG, followed by the United States, which has an annual capacity of 71.6 million metric tons.

Plant capacity for global natural gas liquefaction and export is on incremental growth as LNG trading remains on the rise due to rising demand associated with growth in the world population and economic growth.

New technology in unlocking unconventional petroleum reserves has helped the United States rapidly build capacity from a net energy importer to robust global export factor. The country is expected to add nearly 300 million metric tons of annual LNG export capacity in the future, according to the Energy Information Administration (EIA).

 Europe which relies on cheaper pipeline gas from Russia is currently considering a basket of options in seeking independence from Russian energy supply following the diplomatic and trade rubbles arising from ties invasion of Ukraine.

As the war in Ukraine pushes Russia to the black books of Europe and worsens its commercial fortunes, emerging threats of supply disruptions open new opportunities many other global natural gas supply factors that are angling for new supply roles across the world.

Australian and United States firms declared at an industry forum in Brisbane, Queensland, that fast recession of Russia into a pariah state following its invasion of Ukraine in a messy genocidal war may cost it significant market share.

To executives from Chevron and Woodside Petroleum predicted at the forum that Russia will be cut off from global energy markets for the long term and the governments of the 27 nation economic bloc and the United Kingdom take a joint position to seek independence from Russian fuels.

They said Russia’s isolation from international oil and gas trade might be long term exclusion following its worsening diplomatic relations with its major customers and rising chorus of international outcry over Kremlin’s high handed and brutal pounding of its smaller neighbor  with missiles.

Besides, international oil companies and commodity traders are distancing from Russian transactions in show of solidarity with international community, including the United Nations, which has condemned Russia’s violation of Ukraine’s sovereignty.

CEO of Australia’s Woodside Petroleum, Meg O’Neill, said in the conference covered by the Financial Times that the European Union’s resolve is “firm” to wean itself off of Russian supplies. She added that Moscow is unlikely to be able to participate again once the EU weans off Russian supplies.

“The move has not been an energy move, it’s been a social move as people have recognized the destructive nature of the conflict,” O’Neil said, adding “they will not be lulled into complacency around acquiring energy from Russia in the future.”

O’Neil said that other countries of the world would likely abandon Russian oil and gas in solidarity with the global sentiments against the invasion of Ukraine. She made it clear that Europe is not the only market that can turn to alternatives to Russian energy.

She declared that LNG producers in Australia would help countries switching supply from Russia fill demand in Asia once Russia is eventually out of the trade loop.

“There’s a bit of a moral transition that would have to happen,” Judd said at the Tuesday conference. “The move has not been an energy move, it’s been a social move as people have recognized the destructive nature of the conflict. And so I suspect that if there were a quick change of heart and more responsible actions, there could be a reintegration.”