US scrambles to find replacements for Russia energy supplies in Europe

Resources Minister offers to boost LNG supplies from European nations potentially impacted by gas shortages from Russia in the event of conflict.

Resources Minister Keith Pitt said Australia “stands ready to assist with any request for further supplies” of LNG from European nations potentially impacted by gas shortages from Russia.

It comes as the US scrambles to find alternative gas and LNG supplies for Europe, including from Australia, in the event Russia cuts off the continent’s energy supply amid a looming war over the Ukraine.

Amid reports that US officials were holding talks with Australian and Qatari gas suppliers, Mr Pitt said local LNG exporters were world-leading and reliable companies.

“This shows how important Australian resources are to energy supplies around the world,” Mr Pitt said.

“On top of the Coalition government’s investment in the Strategic Basin Plans as part of our gas led recovery, there are several major projects in the pipeline that will ensure Australia can meet growing global demand and remain a reliable supplier of LNG.”

Mr Pitt warned that ongoing “lawfare” by activists threatened “not just Australian jobs, but energy security in countries that rely on our gas exports”.

After the US put around 8,500 US-based troops on “high alert” amid heightened risk of a Russian incursion into Ukraine, the Biden administration played down the prospect Russia would “weaponise” its massive energy exports in any confrontation but flagged efforts to find alternatives in case.

“This is a one-dimensional economy. It needs oils and gas [income] at least as much as European needs its energy,” a senior US official said on Tuesday, pointing out income from oil and gas made up half the Russian government’s budget.

“If Russia decides to weaponize its supply of natural gas or crude oil, it wouldn‘t be without consequences to the Russian economy,” he added.

President Joe Biden has declared “total” unity among Western powers after crisis talks with European leaders on deterring Russia from invading Ukraine, amid concerns NATO powers were at odds over how to respond to Russian aggression.

“I had a very, very, very good meeting – total unanimity with all the European leaders,” Mr Biden said shortly after finishing a one hour and 20 minute video conference with allied leaders from Europe and NATO on Monday.

White House officials have stepped up preparations for an incursion into Ukraine amid growing signs Russia had no intention of withdrawing its more than 100,000 troops it has amassed on Ukraine’s border.

After weeks of failed negotiations between Russian, US and European officials over the future of Ukraine, the US and allies fear Russia could cut off energy to the European Union, which acquires around 40 per cent of its energy from Russia.

The US government revealed on Tuesday it has been in negotiations with “multiple” governments and energy companies around the world to prepare for a co-ordinated “surge” of output, in case Russia reneged on repeated promises not to cut off power to NATO members in Europe.

“Disruption in physical energy supply transiting through Ukraine would acutely affect natural gas markets in Europe, including how they deploy existing energy stockpiles, which are at low levels,” the senior official told reporters.

The official said Australia and Qatar were party of these discussions but didn’t give further details of specifics given the market sensitive nature of the discussions.

The Biden administration also fleshed out a hi-tech export blockade designed to cripple Russia’s development, which would accompany previously flagged “massive” financial sanctions, thought to including kicking Russia out of the global payments system.

“The gradualism of past is out, this time we’ll start at top of escalation ladder and stay there,” the official said, referring to less severe sanctions the US imposed on Russia in 2014 after the latter seized Crimea from Ukraine.

“We’re talking about denying to Russia downstream products that are critical to its own ambitions in defence, aerospace, lasers, maritime, AI, robotics, and quantum computing,” he added, adamant Russia couldn’t source alternative elsewhere.

“Yes, China is competing in these areas, but if you deny yourself the ability to import from the west, from Europe and the US, you are going to significantly degrade your productive capacity and innovation potential”.

Russia accused the US on Tuesday of fuelling tension in the region after Joe Biden put 8,500 troops on alert for possible dispatch to Europe to beef-up NATO defences.

“We are observing these actions of the United States with profound concern,” Kremlin spokesman Dmitry Peskov said, speaking to journalists Tuesday.