Editorial comment

Adrienne Blume, Editor

Gas Processing and Hydrocarbon Processing are pleased to announce that as of August 2017, Gas Processing will be distributed along with both Pipeline & Gas Journal and Hydrocarbon Processing. The addition of Pipeline & Gas Journal to Gulf Publishing Company’s portfolio of publications will give Gas Processing a more complete reach into the midstream, including the pipeline sector.

Controversy broiling over European pipeline. Gas Processing is not the only entity working to broaden and diversify its reach in the market. Russia remains one of the world’s most-watched areas for pipeline expansion and LNG startups, as explored in this issue’s Regional Focus column on Novatek’s Arctic LNG 2 project.

However, the country’s moves have been fraught with much deliberation and controversy. One hot-button example is Gazprom’s Nord Stream 2 pipeline project, which seeks to carry gas supplies from Russia under the Baltic Sea to Germany. The project is supported by Austria’s OMV, Anglo-Dutch Shell and France’s Engie, among other European firms.

Russia touts the project as a way to “…enhance security of supply, support climate goals and strengthen the internal energy market.”¹ However, some EU officials have expressed worry over the project’s aim to enhance the EU’s reliance on Russia’s geopolitically sensitive gas supplies. Concern has also arisen that support for the pipeline could undermine the EU’s opposition to Russia’s annexation of Crimea.

US mulls legislative retaliation. A new angle on the pipeline controversy has emerged: A US bill (S.722) containing language supporting the imposition of sanctions on European companies backing the Nord Stream 2 project. Although the proposal has not yet been signed into law by the US President at the time of writing, it has also come under scrutiny and skepticism.

Some EU officials say the bill is largely a US push to promote its own LNG exports to Europe. The German and Austrian governments countered the US measure in a joint statement issued on June 15, asserting, “Political sanctions should not in any way be tied to economic interests.” The passage of such legislation, the statement says, could “impact European-American relations in a new and very negative way … Europe’s energy supply network is Europe’s affair, not that of the United States of America!”²

The EU appears to be caught in the middle of Russia’s eagerness to boost its gas exports and the ramp-up of the US LNG export industry. Germany and Austria’s irritable response to the US bill underlines a growing sense of imbalance between the three regions, as the US and Russia continue to compete for supply dominance in the global gas industry. GP

Literature cited

1. Nord Stream 2, “Supplying natural gas to Europe: Rationale,” project website: https://www.nord-stream2.com/project/rationale/
2. Auswärtiges Amt, “Press release: Foreign Minister Gabriel and Austrian Federal Chancellor Kern on the imposition of Russia sanctions by the US Senate,” June 15, 2017, online: http://www.auswaertiges-amt.de/EN/Infoservice/Presse/Meldungen/2017/170615_Kern_Russland.html