How much does natural gas in Ukraine have to do with Russia's motive to control energy supply?

Reportedly Ukraine has sizeable natural gas potential and major deals are in the works for United States oil companies to drill in the area.  Russia supplies Ukraine much of its natural gas and uses the price it charges to control political control.  If the United States promotes and allows the export of our gas to supply Europe and Ukrainia it could affect the international political arena in a major way.  The price of natural gas is significantly higher in Europe and would help the demand to produce more natural gas in this country.  It will be interesting to

watch the action and reaction of this country as this situation matures.  It could effect the natural gas industry in this country in a major way.

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Permalink Reply by Brian Powers on March 4, 2014 at 3:15pm

George-

There are a lot of pipelines already crossing Ukraine from Russia and Kazakhstan enroute to Europe. Tariffs are likely in place that can be used as political levers. Competing pipelines skirt to the south through Turkey and Georgia also enroute to Europe, who is a major consumer of natural gas.

Exporting U.S. gas to Europe in my view would be via LNG and tankers and would quickly become prohibitively expensive. I agree with your view that it might be a factor in the geopolitics of the region, but I see pipelines winning out over other export methods.

My view,

Brian 

Permalink Reply by george m vietze on March 4, 2014 at 4:26pm

Thanks Brian, if Russia takes over the Ukraine area and they control the pipelines and the supply of natura gas in Russia, how do you see that effecting the situation.  Obviously, long term it seem as if the supply is in that area but if Russia controls the supply and major pipelines in that area

could importing from the US fill the gap and take leverage from the Russians?

Permalink Reply by Jim Litwinowicz on March 4, 2014 at 3:36pm

George;  read   "The Crisis in Ukraine......" by Philip Brutz  Scroll down to his post about the deals struck in the past year.  Looks like Putin staged this whole 'revolt' just so he can move in and cancel the contracts.

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