We’ve been carefully following Gazprom’s efforts to break into the U.S. market for several years now, but they don’t seem to be getting anywhere closer. Despite opening a trading office in Houston and holding vague talks with a variety of potential partners, the Kremlin arm of foreign policy hasn’t been able to make the numbers work to tap into the energy veins of North America.
Today, however, they took a step in this direction with a small but important deal with Royal Dutch Shell to break into the U.S. market – from the West, to California. From the Wall Street Journal:
The world’s largest gas producer and the world’s largest natural-gas market have finally come together. Gazprom and Shell announced a deal that will send gas from Russia’s far east to LNG terminals on the U.S. West Coast.
Granted, the volumes are tiny–one analyst figures the Gazprom shipments might make up about 0.5% of U.S. gas demand. But finding new customers and especially getting a foot in the U.S. market, the world’s most liquid for natural gas, has long been an aspiration of Gazprom.
Still, the deal does raise the question–does the U.S. need to import gas, especially from Russia? A big chunk of President Obama’s energy policy hinges on reducing dependence on foreign energy, especially oil. One of T. Boone Pickens’ latest television ads mocks Europe’s dependence on fickle supplies of Russian gas, contrasting that with the U.S., “where we have a choice.”